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The impact of capital adequacy and bank operating efficiency on financial performance of Nepalese commercial banks / Amrit K. Shrestha
Title : The impact of capital adequacy and bank operating efficiency on financial performance of Nepalese commercial banks Material Type: printed text Authors: Amrit K. Shrestha, Author Publication Date: 2016 Pagination: 78p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibliography
Languages : English Descriptors: Bank and banking
Bank capital
Bank investments
Bank loans
Bank managementKeywords: 'capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Banks primary role is to ensure the growth and development of an economy. To ensure availability of funds at any point in time (in meeting with customers’ needs and demands), statutory requirements must be in place to regulate and measure banks’ capital. Capital plays an important role in enhancing banks’ performance. The major concern of the study here is to understand how the capital adequacy and bank operating efficiency influences the overall financial performance of the bank. The importance of the capital is to finance the assets as well as to protect the long term and short term creditors who make the fund available to the business.
The review of the literature reveals the existence of many gaps of knowledge in respect of the factors affecting bank profitability, particularly in the context of Nepal. The review showed that sound operating efficiency and capital adequacy impacted positively on bank’s financial performance with the exception of loans and advances which was found to have a negative impact on banks’ profitability in the period under study. As per the review of the literature most of the empirical studies that have been conducted with the aim of identifying factors affecting bank profitability belong to European Union and some emerging markets such as Philippines, Malaysia and Tunisia. Moreover, the literature review also reveals the existence of controversial conclusions that results from different studies made so far.
The major purpose of the study is to investigate the impact of capital adequacy and bank operating efficiency on financial performance in Nepalese commercial banks. Secondary data have been used for the purpose of the study which is collected from annual reports of the sample banks. The secondary data of the sample banks while 8 years data from 2005/06 to 2012/13 has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, correlation analysis, stepwise regressions have been carried out to examine the secondary data.
Based on the secondary analysis of data, the study showed that there is a significant relationship between financial performance and capital adequacy. Better capital adequacy results in better financial performance. This study revealed that core capital ratio, risk based capital ratio and total capital ratio has negative significant relationship with ROA where as bank operating efficiency, total deposit assets, loan ratio and loan loss provision to total equity have positive and significant relation with ROA. In case of ROE, loan loss provision to total loan has negative and significant relation with ROE whereas, bank operating efficiency, loan ratio, total deposit assets, loan loss provision to total equity has positive relation with ROE.
It is theoretically acceptable that banks with good capital adequacy ratio have a good profitability. A bank with a strong capital adequacy is also able to absorb possible loan losses and thus avoids bank ‘run’, insolvency and failure. This study result indicates that, capital adequacy ratio is positive with both the dependent variable ROA and ROE but it is only significant with ROA and insignificant with ROE.
Finally, most of the studies were all based on quantitative analysis this study somehow presents some analyze related with qualitative analysis. Many more unanswered questions are still hovering in the Nepalese banking field. Thus, to address such unanswered question there is requirement of the fresh research to be conducted on above mentioned various issues. Further studies can extend and provide more in-depth result on capital adequacy and bank operating efficiency on financial performances of Nepal. The results indicate that the major effect of higher capital adequacy, better the financial performances of banks followed by degrade in banking image. The major conclusion of this study is that bank operating efficiency, total deposit assets, loan ratio and loan loss provision to total equity are positively correlated with return on assets. Loan loss provision to total loan, core capital ratio, risk based capital ratio and total capital ratio are negatively correlated with return on assets. Likewise, bank operating efficiency, loan ratio, total deposit assets, loan loss provision to total equity, core capital ratio, risk based capital, total capital ratio are positively correlated with return on equity loan loss provision to total and loan loss reserve to equity are negatively correlated with return on equity.
The impact of capital adequacy and bank operating efficiency on financial performance of Nepalese commercial banks [printed text] / Amrit K. Shrestha, Author . - 2016 . - 78p. ; GRP/Thesis + 4/B.
Including bibliography
Languages : English
Descriptors: Bank and banking
Bank capital
Bank investments
Bank loans
Bank managementKeywords: 'capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Banks primary role is to ensure the growth and development of an economy. To ensure availability of funds at any point in time (in meeting with customers’ needs and demands), statutory requirements must be in place to regulate and measure banks’ capital. Capital plays an important role in enhancing banks’ performance. The major concern of the study here is to understand how the capital adequacy and bank operating efficiency influences the overall financial performance of the bank. The importance of the capital is to finance the assets as well as to protect the long term and short term creditors who make the fund available to the business.
The review of the literature reveals the existence of many gaps of knowledge in respect of the factors affecting bank profitability, particularly in the context of Nepal. The review showed that sound operating efficiency and capital adequacy impacted positively on bank’s financial performance with the exception of loans and advances which was found to have a negative impact on banks’ profitability in the period under study. As per the review of the literature most of the empirical studies that have been conducted with the aim of identifying factors affecting bank profitability belong to European Union and some emerging markets such as Philippines, Malaysia and Tunisia. Moreover, the literature review also reveals the existence of controversial conclusions that results from different studies made so far.
The major purpose of the study is to investigate the impact of capital adequacy and bank operating efficiency on financial performance in Nepalese commercial banks. Secondary data have been used for the purpose of the study which is collected from annual reports of the sample banks. The secondary data of the sample banks while 8 years data from 2005/06 to 2012/13 has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, correlation analysis, stepwise regressions have been carried out to examine the secondary data.
Based on the secondary analysis of data, the study showed that there is a significant relationship between financial performance and capital adequacy. Better capital adequacy results in better financial performance. This study revealed that core capital ratio, risk based capital ratio and total capital ratio has negative significant relationship with ROA where as bank operating efficiency, total deposit assets, loan ratio and loan loss provision to total equity have positive and significant relation with ROA. In case of ROE, loan loss provision to total loan has negative and significant relation with ROE whereas, bank operating efficiency, loan ratio, total deposit assets, loan loss provision to total equity has positive relation with ROE.
It is theoretically acceptable that banks with good capital adequacy ratio have a good profitability. A bank with a strong capital adequacy is also able to absorb possible loan losses and thus avoids bank ‘run’, insolvency and failure. This study result indicates that, capital adequacy ratio is positive with both the dependent variable ROA and ROE but it is only significant with ROA and insignificant with ROE.
Finally, most of the studies were all based on quantitative analysis this study somehow presents some analyze related with qualitative analysis. Many more unanswered questions are still hovering in the Nepalese banking field. Thus, to address such unanswered question there is requirement of the fresh research to be conducted on above mentioned various issues. Further studies can extend and provide more in-depth result on capital adequacy and bank operating efficiency on financial performances of Nepal. The results indicate that the major effect of higher capital adequacy, better the financial performances of banks followed by degrade in banking image. The major conclusion of this study is that bank operating efficiency, total deposit assets, loan ratio and loan loss provision to total equity are positively correlated with return on assets. Loan loss provision to total loan, core capital ratio, risk based capital ratio and total capital ratio are negatively correlated with return on assets. Likewise, bank operating efficiency, loan ratio, total deposit assets, loan loss provision to total equity, core capital ratio, risk based capital, total capital ratio are positively correlated with return on equity loan loss provision to total and loan loss reserve to equity are negatively correlated with return on equity.
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Barcode Call number Media type Location Section Status 168/D 332.120 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available The impact of capital adequacy and credit risk on performance of Nepalese commercial banks / Kohinoor Thapaliya
Title : The impact of capital adequacy and credit risk on performance of Nepalese commercial banks Material Type: printed text Authors: Kohinoor Thapaliya, Author Publication Date: 2015 Pagination: 85p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Bank capital
Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 The impact of capital adequacy and credit risk on performance of Nepalese commercial banks [printed text] / Kohinoor Thapaliya, Author . - 2015 . - 85p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Bank capital
Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Hold
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Barcode Call number Media type Location Section Status 135/D 332.120 THA Thesis/Dissertation Uniglobe Library Social Sciences Available Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks / Asmita Budhathoki
Title : Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks Material Type: printed text Authors: Asmita Budhathoki, Author Publication Date: 2017 Pagination: 99p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Capital adequacy
Credit riskKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Abstract: The economic development and prosperity come from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Credit risk is the current and prospective risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract with the banks or otherwise to perform as agreed. Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013).
This study attempts to analyze the effect of credit risk and capital adequacy on profitability of Nepalese commercial banks. This study is based on the secondary data of 16 commercial banks of Nepal for the time period of 2007/08 to 2015/16, leading to a total of 144 observations. Data and information have been collected from the Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected commercial banks. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between credit risk and capital adequacy with the profitability of Nepalese commercial banks.
The result reveals that average return on assets is highest for NBBL (5.62 percent) and lowest for SUNBL (0.88 percent). The average earnings per share is highest for NABIL (Rs. 83.21 per share) and lowest for MBL (Rs. 10.87 per share). The average loan loss provision ratio is highest for ADBL (14.19 times) and lowest for SCBL (1.49 times). The average capital adequacy is highest for ADBL (16.35 percent) and lowest for MBL (10.74 percent). The average leverage ratio is highest for EBL (12.78 times) and lowest for ADBL (6.28 times). The average non-performing loan ratio is highest for NBBL (9.47 percent) and lowest for SCBL (0.61 percent). The average credit to deposit ratio is highest for ADBL (105.50 percent) and lowest for SCBL (50.86 percent). NABIL has the highest average bank size (Rs.86.22 billion) and KBL has the lowest (Rs. 25.81 billion). Annual inflation rate is highest in the year 2009/10 (12.6 percent) and lowest in the year 2007/08 (6.7 percent). Annual GDP growth rate is highest in the year 2007/08 (6.10 percent) and lowest in the year 2015/16 (0.77 percent). The descriptive statistics for selected commercial bank shows that the average return on assets ratio is 1.89 percent, average earning per share is Rs. 38.16 per share, average loan loss provision is 3.71times, average capital adequacy ratio is 12.21percent, average non-performing loan ratio is 2.41 percent, average leverage ratio is 9.88 percent, average credit to deposit ratio is 78.58 percent, average bank size is Rs 43.79 billion, average inflation is 9.18 percent and average GDP growth is 4.13 percent.
The study shows that the capital adequacy ratio is positively related to return on assets (ROA) and earnings per share (EPS). It indicates that increase in capital adequacy ratio leads to increase in ROA and EPS. The study also shows that bank size and inflation are positively related to ROA and EPS. It indicates that higher the bank size and inflation, higher would be the ROA and EPS of Nepalese commercial banks. However, the result shows that loan loss provision and non-performing loan have a negative relationship with ROA and EPS. This indicates that increase in loan loss provision and non-performing loan leads to decrease in ROA and EPS. Likewise, the study reveals that leverage, credit to deposit ratio, and GDP are negatively related to the ROA and EPS. This indicates that increase in leverage, credit to deposit ratio, and GDP leads to decrease in ROA and EPS. The regression results also show that beta coefficients are positive for leverage, bank size and GDP for ROA and EPS whereas beta coefficients are negative for non-performing loans and credit to deposit ratio. However, the coefficients are significant only for bank size at 5 percent level.
Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks [printed text] / Asmita Budhathoki, Author . - 2017 . - 99p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Capital adequacy
Credit riskKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Abstract: The economic development and prosperity come from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Credit risk is the current and prospective risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract with the banks or otherwise to perform as agreed. Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013).
This study attempts to analyze the effect of credit risk and capital adequacy on profitability of Nepalese commercial banks. This study is based on the secondary data of 16 commercial banks of Nepal for the time period of 2007/08 to 2015/16, leading to a total of 144 observations. Data and information have been collected from the Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected commercial banks. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between credit risk and capital adequacy with the profitability of Nepalese commercial banks.
The result reveals that average return on assets is highest for NBBL (5.62 percent) and lowest for SUNBL (0.88 percent). The average earnings per share is highest for NABIL (Rs. 83.21 per share) and lowest for MBL (Rs. 10.87 per share). The average loan loss provision ratio is highest for ADBL (14.19 times) and lowest for SCBL (1.49 times). The average capital adequacy is highest for ADBL (16.35 percent) and lowest for MBL (10.74 percent). The average leverage ratio is highest for EBL (12.78 times) and lowest for ADBL (6.28 times). The average non-performing loan ratio is highest for NBBL (9.47 percent) and lowest for SCBL (0.61 percent). The average credit to deposit ratio is highest for ADBL (105.50 percent) and lowest for SCBL (50.86 percent). NABIL has the highest average bank size (Rs.86.22 billion) and KBL has the lowest (Rs. 25.81 billion). Annual inflation rate is highest in the year 2009/10 (12.6 percent) and lowest in the year 2007/08 (6.7 percent). Annual GDP growth rate is highest in the year 2007/08 (6.10 percent) and lowest in the year 2015/16 (0.77 percent). The descriptive statistics for selected commercial bank shows that the average return on assets ratio is 1.89 percent, average earning per share is Rs. 38.16 per share, average loan loss provision is 3.71times, average capital adequacy ratio is 12.21percent, average non-performing loan ratio is 2.41 percent, average leverage ratio is 9.88 percent, average credit to deposit ratio is 78.58 percent, average bank size is Rs 43.79 billion, average inflation is 9.18 percent and average GDP growth is 4.13 percent.
The study shows that the capital adequacy ratio is positively related to return on assets (ROA) and earnings per share (EPS). It indicates that increase in capital adequacy ratio leads to increase in ROA and EPS. The study also shows that bank size and inflation are positively related to ROA and EPS. It indicates that higher the bank size and inflation, higher would be the ROA and EPS of Nepalese commercial banks. However, the result shows that loan loss provision and non-performing loan have a negative relationship with ROA and EPS. This indicates that increase in loan loss provision and non-performing loan leads to decrease in ROA and EPS. Likewise, the study reveals that leverage, credit to deposit ratio, and GDP are negatively related to the ROA and EPS. This indicates that increase in leverage, credit to deposit ratio, and GDP leads to decrease in ROA and EPS. The regression results also show that beta coefficients are positive for leverage, bank size and GDP for ROA and EPS whereas beta coefficients are negative for non-performing loans and credit to deposit ratio. However, the coefficients are significant only for bank size at 5 percent level.
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Barcode Call number Media type Location Section Status 407/D 332.120 BUD Thesis/Dissertation Uniglobe Library Social Sciences Available Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks / Anjana Kumari Chaudhary
Title : Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks Material Type: printed text Authors: Anjana Kumari Chaudhary, Author Publication Date: 2017 Pagination: 101p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Capital adequacy Keywords: capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Commercial banking is one of the important factor of Nepalese economy. Commercial banks are the main pillar of the financial system in Nepal. It makes the flow of resources for the rest of the character of the economy. Finance is life blood of the trade, commerce and are the vanes in the circulation of the funds in economy. Growth of any country depends upon the strong banking and financial system. As most of the economic depression are the result of the banking system failure. The importance of the banking sectors is immense in the progress and richness of any state. The economic development and prosperity comes from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Bank is a backbone of all the industries, because every transaction where money is involved, the bank is the main pillar of funding (Haque& Tariq, 2012).
Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013). Jinghan (2010) asserts that banks need a high degree of liquidity in their assets portfolio. The bank must hold a sufficient large proportion of its assets the form of cash and liquid assets for the purpose enhancing customers’ confidence and corporate performance (profitability). According to Christian et al. (2008), capital adequacy measures provide significant information regarding a firm's returns; while a few of the individual variables representing asset quality and earnings are informative. Size and growth and loan exposure measures do not appear to have any significant explanatory power when examining returns.
Higher capital improves banks’ ability to create liquidity. Liquidity creation exposes banks to risk, the more liquidity is created, the greater are the likelihood and severity of losses associated with having to dispose of illiquid assets to meet the liquidity demands of customers (Diamond and Dybvig 1983). Recent contributions suggest that bank capital may impede this liquidity creation process because bank capital diminishes the financial fragility that facilitates the liquidity creation process (Diamond and Rajan, 2000, 2001). According to the theory of financial intermediation, an important role of banks in the economy is to provide liquidity by funding long-term, illiquid assets with short-term, liquid liabilities. Through this function, banks create liquidity as they hold illiquid assets and provide cash and demand deposits to the rest of the economy.
This study attempts to explore the effect of capital adequacy requirements on liquidity of selected commercial banks in context of Nepal. This study is based on the secondary data for 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. The data and information are collected from various issues of Banking and Financial Statistics, Bank Supervision Report published by NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as this study examines the impact of capital adequacy ratio, leverage ratio, deposits, equity to total assets, bank size and total debt to total assets ratio on liquidity of Nepalese commercial banks.
The result shows that average loan to deposit ratio is highest for CBIL (2.90 percent) and lowest for SUBL (83.80 percent). The average liquid assets to total deposit ratio is highest for NMBBL (78.93 rupees) and lowest for HBL (9.74 rupees). The average capital adequacy ratio is highest for NMBBL (16.86 percent) and lowest for NIBL (10.38 percent). Similarly, leverage ratio is highest for EBL (13.75 percent) and lowest for NBBL (6.82 percent). The average deposits is highest for NABIL (Rs.63.77 billion) and lowest for CBILRs.16.75 billion). Likewise, average equity to total assets ratio is highest for SUBL (11.62 percent) and lowest forEBL (7.93 percent). The average bank size is highest for NIBL (RS.129.78 billion) and lowest for NCCBL (RS.30.23billion) and average total debt to total assets ratio is highest for EBL (92.52 percent) and lowest for NBBL (87.06 percent).
The descriptive statistics for selected commercial bank shows that the average loan to deposit ratio, liquid assets to total deposit ratio, capital adequacy ratio, leverage ratio, deposits, equity to total assets ratio, bank size and total debt to total assets are77.47 percent, 19.08 rupees, 12.10 percent, 10.21 percent, Rs.34.35 billion, 9.20 percent, Rs.39.59 billion and 90.59 percent.
The study shows that the capital adequacy and equity to total assets ratio are positively related to a loan to deposit ratio and liquid assets to total deposits ratio. It indicates that increase in capital adequacy and equity to total assets ratio leads to increase in loan to deposit ratio and liquid assets to total deposits ratio. However, the result shows that leverage, deposits ratio, size and total debt to total assets ratio have a negative relationship with loan to deposit ratio and liquid assets to total deposits ratio. This indicates that increase leverage, deposits ratio, size and total debt to total assets ratio leads to decrease in loan to deposit ratio and liquid assets to total deposits ratio. The regression results also show that beta coefficients are positive for capital adequacy and equity to total assets ratio for loan to deposit ratio and liquid assets to total deposits ratio whereas beta coefficients are negative for leverage, deposits ratio, size and total debt to total assets ratio. However, coefficients are significant only for leverage and deposits ratio at 5 percent level of significance.
Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks [printed text] / Anjana Kumari Chaudhary, Author . - 2017 . - 101p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Capital adequacy Keywords: capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Commercial banking is one of the important factor of Nepalese economy. Commercial banks are the main pillar of the financial system in Nepal. It makes the flow of resources for the rest of the character of the economy. Finance is life blood of the trade, commerce and are the vanes in the circulation of the funds in economy. Growth of any country depends upon the strong banking and financial system. As most of the economic depression are the result of the banking system failure. The importance of the banking sectors is immense in the progress and richness of any state. The economic development and prosperity comes from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Bank is a backbone of all the industries, because every transaction where money is involved, the bank is the main pillar of funding (Haque& Tariq, 2012).
Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013). Jinghan (2010) asserts that banks need a high degree of liquidity in their assets portfolio. The bank must hold a sufficient large proportion of its assets the form of cash and liquid assets for the purpose enhancing customers’ confidence and corporate performance (profitability). According to Christian et al. (2008), capital adequacy measures provide significant information regarding a firm's returns; while a few of the individual variables representing asset quality and earnings are informative. Size and growth and loan exposure measures do not appear to have any significant explanatory power when examining returns.
Higher capital improves banks’ ability to create liquidity. Liquidity creation exposes banks to risk, the more liquidity is created, the greater are the likelihood and severity of losses associated with having to dispose of illiquid assets to meet the liquidity demands of customers (Diamond and Dybvig 1983). Recent contributions suggest that bank capital may impede this liquidity creation process because bank capital diminishes the financial fragility that facilitates the liquidity creation process (Diamond and Rajan, 2000, 2001). According to the theory of financial intermediation, an important role of banks in the economy is to provide liquidity by funding long-term, illiquid assets with short-term, liquid liabilities. Through this function, banks create liquidity as they hold illiquid assets and provide cash and demand deposits to the rest of the economy.
This study attempts to explore the effect of capital adequacy requirements on liquidity of selected commercial banks in context of Nepal. This study is based on the secondary data for 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. The data and information are collected from various issues of Banking and Financial Statistics, Bank Supervision Report published by NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as this study examines the impact of capital adequacy ratio, leverage ratio, deposits, equity to total assets, bank size and total debt to total assets ratio on liquidity of Nepalese commercial banks.
The result shows that average loan to deposit ratio is highest for CBIL (2.90 percent) and lowest for SUBL (83.80 percent). The average liquid assets to total deposit ratio is highest for NMBBL (78.93 rupees) and lowest for HBL (9.74 rupees). The average capital adequacy ratio is highest for NMBBL (16.86 percent) and lowest for NIBL (10.38 percent). Similarly, leverage ratio is highest for EBL (13.75 percent) and lowest for NBBL (6.82 percent). The average deposits is highest for NABIL (Rs.63.77 billion) and lowest for CBILRs.16.75 billion). Likewise, average equity to total assets ratio is highest for SUBL (11.62 percent) and lowest forEBL (7.93 percent). The average bank size is highest for NIBL (RS.129.78 billion) and lowest for NCCBL (RS.30.23billion) and average total debt to total assets ratio is highest for EBL (92.52 percent) and lowest for NBBL (87.06 percent).
The descriptive statistics for selected commercial bank shows that the average loan to deposit ratio, liquid assets to total deposit ratio, capital adequacy ratio, leverage ratio, deposits, equity to total assets ratio, bank size and total debt to total assets are77.47 percent, 19.08 rupees, 12.10 percent, 10.21 percent, Rs.34.35 billion, 9.20 percent, Rs.39.59 billion and 90.59 percent.
The study shows that the capital adequacy and equity to total assets ratio are positively related to a loan to deposit ratio and liquid assets to total deposits ratio. It indicates that increase in capital adequacy and equity to total assets ratio leads to increase in loan to deposit ratio and liquid assets to total deposits ratio. However, the result shows that leverage, deposits ratio, size and total debt to total assets ratio have a negative relationship with loan to deposit ratio and liquid assets to total deposits ratio. This indicates that increase leverage, deposits ratio, size and total debt to total assets ratio leads to decrease in loan to deposit ratio and liquid assets to total deposits ratio. The regression results also show that beta coefficients are positive for capital adequacy and equity to total assets ratio for loan to deposit ratio and liquid assets to total deposits ratio whereas beta coefficients are negative for leverage, deposits ratio, size and total debt to total assets ratio. However, coefficients are significant only for leverage and deposits ratio at 5 percent level of significance.
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Barcode Call number Media type Location Section Status 399/D 332.120 CHA Books Uniglobe Library Social Sciences Available Determinants of capital adequacy of Nepalese commercial banks / Manisha Baral
Title : Determinants of capital adequacy of Nepalese commercial banks Material Type: printed text Authors: Manisha Baral, Author Publication Date: 2016 Pagination: 79p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: capital adequacy bank capital financial performance' Class number: 332.120 Determinants of capital adequacy of Nepalese commercial banks [printed text] / Manisha Baral, Author . - 2016 . - 79p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: capital adequacy bank capital financial performance' Class number: 332.120 Hold
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Barcode Call number Media type Location Section Status 156/D 332.120 BAR Thesis/Dissertation Uniglobe Library Social Sciences Available