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The impact of liquidity management on profitability in Nepalese commercial banks / Nitish Bajracharya
Title : The impact of liquidity management on profitability in Nepalese commercial banks Material Type: printed text Authors: Nitish Bajracharya, Author Publication Date: 2016 Pagination: 113p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Liquidity (Economics)
liquidity on profitabilityKeywords: 'liquidity return on equity return on assets liquidity risk Class number: 332.632 Abstract: Liquidity is a financial term that means the amount of capital that is available for investment. Todays, most of this capital is credit fund. That is because the large financial institutions that do most investments prefer using borrowed money (Felix and Claudine, 2008). Low interest rates mean credit is cheaper, thus, businesses and investors are more likely to borrow. The return on investment has to be higher than the interest rate, to make investments attractive. In this way, high liquidity spurs economic growth (Heffernan, 1996). The banking institution had contributed significantly to the effectiveness of the entire financial system as they offer an efficient institutional mechanism through which resources can be mobilized and directed from less essential uses to more productive investments (Wilner, 2000).
Liquidity creation itself is seen as the primary source of economic welfare contribution by banks and also as their primary source of risk (Bryant 1980; Diamond and Dybvig 1983; Calomiris and Kahn 1991). Therefore, virtually every financial transaction or commitment has implications for bank’s liquidity. In Nepalese context, Karki (2004) found that liquidity ratio was relatively fluctuating over the period, return on equity is found satisfactory and there is positive relationship between deposits and loan advances. Joshi (2004) found that the liquidity and banks loan are positively related to banks profitability and Maharjan (2007) revealed that the capital adequacy and liquidity is positively associated with banks profitability.
This study has aimed to determine the impact of bank liquidity on financial performance through analyzing statistically significant factors affecting banks liquidity on financial performance. The other objectives are to determine a relationship between bank profitability and bank liquidity management, to ascertain the impact of cash balances on bank performance, and to analyze the most important indicators of the liquidity management and investigates the effect of each indicator on the banks’ profitability and to investigate the impact of liquidity risk on performance of Nepalese commercial banks.
The research design adopted in this study consists of descriptive and causal comparative research designs to deal with the various issues raised in this study. The descriptive research design has been adopted to undertake fact finding operation searching for adequate information in Nepalese context. The study is based on pooled cross-sectional analysis of secondary data of 16 commercial banks for the period 2004/05 to 2013/14.
The study shows that average return on assets is 1.82 percent and average return on equity is 13.27 percent. Similarly, average investment ratio is 0.71 times whereas average net credit facility to total assetsis noticed to be 71.13 percent for selected banks during the study period. Likewise, the average capital ratio is observed to be 7 percent and average liquidity risk is found to be 7.68 percent. In the same way, average quick ratio is 6.60 times whereas average total assets are noticed to be Rs. 31,443 million. Furthermore, average cash is observed to be Rs. 1,317.1 million and average cash to deposits ratio is found to be 4 percent. Finally, average cash to assets ratio is found to be 3 percent.
It is found that beta coefficients are positive for investment ratio, net credit facility to total assets, capital ratio, liquidity risk, total assets, and cash with return on assets indicating that increase in investment ratio, NCF_TA, capital ratio, liquidity risk, total assets, and cashleads to increase in return on assets. Likewise, the result observed negative relationship of return on assets with quick ratio, cash deposits ratio and cash assets ratio indicating that higher quick ratio, cash deposits ratio and cash assets ratio, lower would be the return on assets. The result also shows that there is positive relationship of return on equity with investment ratio, net credit facility to total assets, and capital ratio whereas there is negative relationship of return on equity with liquidity risk, quick ratio, total assets, cash, cash deposits ratio and cash assets ratio.
The report also investigates the fact that the analysis conducted has limitations. Finance companies and development banks has not been used in study, only 16 commercial banks has been used as sample due to availability of data and the study has assumed the linear relationship between dependent and independent variables.The impact of liquidity management on profitability in Nepalese commercial banks [printed text] / Nitish Bajracharya, Author . - 2016 . - 113p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Liquidity (Economics)
liquidity on profitabilityKeywords: 'liquidity return on equity return on assets liquidity risk Class number: 332.632 Abstract: Liquidity is a financial term that means the amount of capital that is available for investment. Todays, most of this capital is credit fund. That is because the large financial institutions that do most investments prefer using borrowed money (Felix and Claudine, 2008). Low interest rates mean credit is cheaper, thus, businesses and investors are more likely to borrow. The return on investment has to be higher than the interest rate, to make investments attractive. In this way, high liquidity spurs economic growth (Heffernan, 1996). The banking institution had contributed significantly to the effectiveness of the entire financial system as they offer an efficient institutional mechanism through which resources can be mobilized and directed from less essential uses to more productive investments (Wilner, 2000).
Liquidity creation itself is seen as the primary source of economic welfare contribution by banks and also as their primary source of risk (Bryant 1980; Diamond and Dybvig 1983; Calomiris and Kahn 1991). Therefore, virtually every financial transaction or commitment has implications for bank’s liquidity. In Nepalese context, Karki (2004) found that liquidity ratio was relatively fluctuating over the period, return on equity is found satisfactory and there is positive relationship between deposits and loan advances. Joshi (2004) found that the liquidity and banks loan are positively related to banks profitability and Maharjan (2007) revealed that the capital adequacy and liquidity is positively associated with banks profitability.
This study has aimed to determine the impact of bank liquidity on financial performance through analyzing statistically significant factors affecting banks liquidity on financial performance. The other objectives are to determine a relationship between bank profitability and bank liquidity management, to ascertain the impact of cash balances on bank performance, and to analyze the most important indicators of the liquidity management and investigates the effect of each indicator on the banks’ profitability and to investigate the impact of liquidity risk on performance of Nepalese commercial banks.
The research design adopted in this study consists of descriptive and causal comparative research designs to deal with the various issues raised in this study. The descriptive research design has been adopted to undertake fact finding operation searching for adequate information in Nepalese context. The study is based on pooled cross-sectional analysis of secondary data of 16 commercial banks for the period 2004/05 to 2013/14.
The study shows that average return on assets is 1.82 percent and average return on equity is 13.27 percent. Similarly, average investment ratio is 0.71 times whereas average net credit facility to total assetsis noticed to be 71.13 percent for selected banks during the study period. Likewise, the average capital ratio is observed to be 7 percent and average liquidity risk is found to be 7.68 percent. In the same way, average quick ratio is 6.60 times whereas average total assets are noticed to be Rs. 31,443 million. Furthermore, average cash is observed to be Rs. 1,317.1 million and average cash to deposits ratio is found to be 4 percent. Finally, average cash to assets ratio is found to be 3 percent.
It is found that beta coefficients are positive for investment ratio, net credit facility to total assets, capital ratio, liquidity risk, total assets, and cash with return on assets indicating that increase in investment ratio, NCF_TA, capital ratio, liquidity risk, total assets, and cashleads to increase in return on assets. Likewise, the result observed negative relationship of return on assets with quick ratio, cash deposits ratio and cash assets ratio indicating that higher quick ratio, cash deposits ratio and cash assets ratio, lower would be the return on assets. The result also shows that there is positive relationship of return on equity with investment ratio, net credit facility to total assets, and capital ratio whereas there is negative relationship of return on equity with liquidity risk, quick ratio, total assets, cash, cash deposits ratio and cash assets ratio.
The report also investigates the fact that the analysis conducted has limitations. Finance companies and development banks has not been used in study, only 16 commercial banks has been used as sample due to availability of data and the study has assumed the linear relationship between dependent and independent variables.Hold
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Barcode Call number Media type Location Section Status 201/D 332.632 BAJ Thesis/Dissertation Uniglobe Library Social Sciences Available The impact of market power and efficiency on performance of Nepalese commercial banks / Pramesh Shrestha
Title : The impact of market power and efficiency on performance of Nepalese commercial banks Material Type: printed text Authors: Pramesh Shrestha, Author Publication Date: 2016 Pagination: 101p. Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Market power Class number: 338.820 Abstract: The relationship between performance and market structure has generated two competing hypotheses namely, traditional structure conduct performance hypothesis (SCP) and the efficient structure hypothesis (EFS) (Ardianty and Viverita, 2011). The SCP hypothesis suggests that the level of concentration in a particular market will influence the degree of competition among firms in that market (Katib, 2004). Empirically, the SCP relationship is tested by examining the relationship between profitability and market concentration, with a positive relationship indicating non-competitive behavior in concentrated markets (Goldberg and Rai, 1996). High concentration is the useful signal of less competitive and hence inefficient market in which large firm charge higher loan rates, pay lower deposit rates, and lower collusion costs through their market power, thus generate more profits (Park and weber, 2006; Casu and Girardone, 2006; Demirguc-Kunt, et al., 2004; Katib, 2004).
The major purpose of this study is to identify the impact of market power and performance on efficiency of Nepalese commercial banks. The study has the following specific objectives is to analyze the structure and pattern of ROA, NIM, market share in terms of total deposits (MSDEP), market share in terms of total assets (MSASSET), leverage ratio, capital ratio, staff expenses to total assets (SETA) in Nepalese commercial banks.
This study is completely based on secondary data. This study has been based on pooled cross sectional data of 9 years from 2004/05 to 2012/13. Different sources have been used to collect data on variables of the interest. Annual reports of respective banks, supervision report published by Nepal Rastra Bank and banking statistics published by Nepal Rastra Bank are the major sources, which have been used to collect necessary data required to undertake the study. Data that has been not provided on above mentioned sources are collected by visiting respective banks’ corporate offices.
The market share and market concentration are positively related to bank profitability in terms of both return on assets and net interest margin. The result shows that there is a positive relationship between efficiency and bank profitability indicating that higher the efficiency, higher would be bank profitability. Capital ratio and staff expenses to total assets are positively correlated with return on assets. Leverage ratio was found to be negatively correlated with return on assets.
The beta coefficient for market share is positive and significant with return on assets. It indicates that increase in market share leads to increase in return on assets of Nepalese commercial banks. A negative impact of market concentration on firm profitability has been found in Nepalese commercial banks. Negative beta coefficients postulated higher the market concentration of the banks lower would be the profitability. Efficiency is significant in explaining the profitability of the banks. The beta coefficients are positive, which indicates that higher the efficiency higher would be the bank’s profitability.
The major conclusion of the study is that profitability of Nepalese commercial banks is not determined by concentration rather they generate their performances through efficient activities and their market share. Moreover, this study also concludes that modified efficient structure hypothesis is in charge in Nepalese commercial banking industry.
The impact of market power and efficiency on performance of Nepalese commercial banks [printed text] / Pramesh Shrestha, Author . - 2016 . - 101p. ; GRP/Thesis + 6/B.
Languages : English
Descriptors: Market power Class number: 338.820 Abstract: The relationship between performance and market structure has generated two competing hypotheses namely, traditional structure conduct performance hypothesis (SCP) and the efficient structure hypothesis (EFS) (Ardianty and Viverita, 2011). The SCP hypothesis suggests that the level of concentration in a particular market will influence the degree of competition among firms in that market (Katib, 2004). Empirically, the SCP relationship is tested by examining the relationship between profitability and market concentration, with a positive relationship indicating non-competitive behavior in concentrated markets (Goldberg and Rai, 1996). High concentration is the useful signal of less competitive and hence inefficient market in which large firm charge higher loan rates, pay lower deposit rates, and lower collusion costs through their market power, thus generate more profits (Park and weber, 2006; Casu and Girardone, 2006; Demirguc-Kunt, et al., 2004; Katib, 2004).
The major purpose of this study is to identify the impact of market power and performance on efficiency of Nepalese commercial banks. The study has the following specific objectives is to analyze the structure and pattern of ROA, NIM, market share in terms of total deposits (MSDEP), market share in terms of total assets (MSASSET), leverage ratio, capital ratio, staff expenses to total assets (SETA) in Nepalese commercial banks.
This study is completely based on secondary data. This study has been based on pooled cross sectional data of 9 years from 2004/05 to 2012/13. Different sources have been used to collect data on variables of the interest. Annual reports of respective banks, supervision report published by Nepal Rastra Bank and banking statistics published by Nepal Rastra Bank are the major sources, which have been used to collect necessary data required to undertake the study. Data that has been not provided on above mentioned sources are collected by visiting respective banks’ corporate offices.
The market share and market concentration are positively related to bank profitability in terms of both return on assets and net interest margin. The result shows that there is a positive relationship between efficiency and bank profitability indicating that higher the efficiency, higher would be bank profitability. Capital ratio and staff expenses to total assets are positively correlated with return on assets. Leverage ratio was found to be negatively correlated with return on assets.
The beta coefficient for market share is positive and significant with return on assets. It indicates that increase in market share leads to increase in return on assets of Nepalese commercial banks. A negative impact of market concentration on firm profitability has been found in Nepalese commercial banks. Negative beta coefficients postulated higher the market concentration of the banks lower would be the profitability. Efficiency is significant in explaining the profitability of the banks. The beta coefficients are positive, which indicates that higher the efficiency higher would be the bank’s profitability.
The major conclusion of the study is that profitability of Nepalese commercial banks is not determined by concentration rather they generate their performances through efficient activities and their market share. Moreover, this study also concludes that modified efficient structure hypothesis is in charge in Nepalese commercial banking industry.
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Barcode Call number Media type Location Section Status 217/D 338.820 SHR Books Uniglobe Library Social Sciences Available The impact of market power and efficiency on performance of Nepalese commercial banks / Prashant Kumar Mishra
Title : The impact of market power and efficiency on performance of Nepalese commercial banks Material Type: printed text Authors: Prashant Kumar Mishra, Author Pagination: 106p. Size: GRP/Thesis Accompanying material: 10/B Languages : English Abstract: Market concentration is one of the most important determinants of competitiveness and debate about the structure of the banking industry is increasing day by day. The world has seen a rapid consolidation of banks during the past several decades, which has caused a decrease in the number of banks and an increase in banks’ average size (Evrensel, 2001). As a result, many banks have grown too big and that the banking system has become too concentrated. At the same time, several recent studies show that banking consolidation and changes in the structure of the banking industry significantly affect not only the performance of individual banks but also the stability of the entire banking system (Berger et al., 2009). Due to this, the recent financial literature has become very concerned with discussing the effects of concentration on banking performance. In investigating the relationship between the concentration and competition in banking sector there are two competing approaches: the structure-conduct performance (SCP) hypothesis and the efficient-structure (EFS) hypothesis are developed.
SCP hypothesis postulates that the higher market concentration leads to higher market power and, hence, to the higher normal profit generated by the bank (Bain, 1951). Banks with higher market power in a high concentrated market are more able to set the lower price of deposits and the higher price of credit (Park and Weber, 2006). On the other hand, efficient structure hypothesis developed by Demsetz (1973) and Peltzman (1977) challenged the line of reasoning of the traditional SCP and offer a competing explanation of the relation between market structure and performance. The hypothesis claims that if banks achieve a higher degree of efficiency, its profit maximizing behaviour will allow it to gain market share by reducing prices (Molyneux and Forbes, 1992). Market structure is therefore shaped endogenously by banks' performance, thus, concentration is a result of the superior efficiency of lending banks (Vesala, 1995).
Lloyd-Williams et al. (1994) reported a positive relation between the concentration and the return on assets. Al-Obaidan (2008) found positive and statistically significant influence of concentration on ROE indicator. Nabieu (2013) found that market concentration and market share significantly determines profitability in Ghana, signifying the strong acceptance of the SCP hypothesis. Park and Weber (2006) observed that bank efficiency has a significant effect on bank profitability and support the efficient structure hypothesis. In Nepalese context few studies have been conducted to test two competing hypotheses namely traditional structure conduct performance (SCP) and efficient structure performance (EFS) hypothesis such as Pradhan and Shrestha (2015), Gajurel and Pradhan (2011), and Gajurel (2010). Still there different views on SCP and EFS hypothesis, Nepalese studies have shown no support to the efficient structure hypothesis. This study is accompanied in the context of Nepalese commercial banks to see whether the result support the previous studies.
The major objective of this study is to test the structure conduct performance (SCP) hypothesis and efficient structure (EFS) hypothesis in Nepalese commercial banking sector. The study is based on the secondary data of 17 Nepalese commercial banks for the period of 2008 to 2015 with a total of 136 observations. Data and information have been collected from the World Economic Outlook of International Monetary Fund, annual reports of selected commercial banks and Banking and Financial Statistics published by Nepal Rastra Bank. This study has employed descriptive research design and causal comparative research design to deal with issues associated with the impact of market share, concentration, and efficiency on profitability of selected commercial banks. The relationship between dependent and independent variables are analyzed in single step and multi-step regression analysis. Return on assets, net interest margin and return on equity are the dependent variables, whereas market share, Concentration ratio, Herfindahl - Hirschman index, efficiency, firm size, age of the firm and inflation are independent variables.
The result shows that average return on asset is highest for GIB (2.93 percent) and lowest for MBL (0.65 percent). The average return on equity is higher for GIB (31.09 percent) and lowest for MBL (7.69 percent). The average market share is highest for NABIL (6.70 percent) and lowest for GIB (1.15 percent). The Herfindahl - Hirschman index is highest for the year 2010 of 18.33 percent and lowest for the year 2008 of 6.82 percent. The concentration ratio shows that it is highest for the year 2008 of 48 percent and lowest for the year 2012 of 30 percent. The average efficiency is highest for GIB 0.99) and lowest is for NSBI (0.72). NIBL has highest average firm size (Rs. 71.09 Billion) and GIB has lowest of (Rs. 12.69 Billion). The average age is highest for NABIL (28.50 years) and lowest for PCB, SUBL and NMB (4.5 years).The inflation shows that it is highest for the year 2009 of 12.6 percent.
The descriptive statistics for selected commercial bank shows that mean return on assets, net interest margin, return on equity, Market share, Herfindahl - Hirschman index, concentration ratio, firm size, age of the firm and inflation are 1.73 percent,19.14 percent, 3.39 percent, 3.35 percent, 4.88 percent, 37.5 percent, 0.91, Rs. 36.28 Billion, 14.67 years and 9.13 percent respectively.
The study of selected commercial bank shows that market share, concentration, efficiency, firm size and age of the firm are positivity correlated to bank performance where as inflation is negatively correlated.
The regression analysis reveals that market share and concentration have positive and significant impact on performance of Nepalese commercial banks measured in term of ROA, and ROE. This indicates that increase in these variables leads to increase in profitability of Nepalese commercial banks. Similarly, beta coefficient is positive for efficiency. However, coefficients are not significant. This indicates that efficiency of Nepalese commmercial banks has no impact on the performance. Overall, the result shows that the efficiency structure hypothesis is not accepted rather the significant beta coefficient of concentration and positive coefficients of market share shows that SCP hypothesis is explaining the profitability of Nepalese commercial banks.
The impact of market power and efficiency on performance of Nepalese commercial banks [printed text] / Prashant Kumar Mishra, Author . - [s.d.] . - 106p. ; GRP/Thesis + 10/B.
Languages : English
Abstract: Market concentration is one of the most important determinants of competitiveness and debate about the structure of the banking industry is increasing day by day. The world has seen a rapid consolidation of banks during the past several decades, which has caused a decrease in the number of banks and an increase in banks’ average size (Evrensel, 2001). As a result, many banks have grown too big and that the banking system has become too concentrated. At the same time, several recent studies show that banking consolidation and changes in the structure of the banking industry significantly affect not only the performance of individual banks but also the stability of the entire banking system (Berger et al., 2009). Due to this, the recent financial literature has become very concerned with discussing the effects of concentration on banking performance. In investigating the relationship between the concentration and competition in banking sector there are two competing approaches: the structure-conduct performance (SCP) hypothesis and the efficient-structure (EFS) hypothesis are developed.
SCP hypothesis postulates that the higher market concentration leads to higher market power and, hence, to the higher normal profit generated by the bank (Bain, 1951). Banks with higher market power in a high concentrated market are more able to set the lower price of deposits and the higher price of credit (Park and Weber, 2006). On the other hand, efficient structure hypothesis developed by Demsetz (1973) and Peltzman (1977) challenged the line of reasoning of the traditional SCP and offer a competing explanation of the relation between market structure and performance. The hypothesis claims that if banks achieve a higher degree of efficiency, its profit maximizing behaviour will allow it to gain market share by reducing prices (Molyneux and Forbes, 1992). Market structure is therefore shaped endogenously by banks' performance, thus, concentration is a result of the superior efficiency of lending banks (Vesala, 1995).
Lloyd-Williams et al. (1994) reported a positive relation between the concentration and the return on assets. Al-Obaidan (2008) found positive and statistically significant influence of concentration on ROE indicator. Nabieu (2013) found that market concentration and market share significantly determines profitability in Ghana, signifying the strong acceptance of the SCP hypothesis. Park and Weber (2006) observed that bank efficiency has a significant effect on bank profitability and support the efficient structure hypothesis. In Nepalese context few studies have been conducted to test two competing hypotheses namely traditional structure conduct performance (SCP) and efficient structure performance (EFS) hypothesis such as Pradhan and Shrestha (2015), Gajurel and Pradhan (2011), and Gajurel (2010). Still there different views on SCP and EFS hypothesis, Nepalese studies have shown no support to the efficient structure hypothesis. This study is accompanied in the context of Nepalese commercial banks to see whether the result support the previous studies.
The major objective of this study is to test the structure conduct performance (SCP) hypothesis and efficient structure (EFS) hypothesis in Nepalese commercial banking sector. The study is based on the secondary data of 17 Nepalese commercial banks for the period of 2008 to 2015 with a total of 136 observations. Data and information have been collected from the World Economic Outlook of International Monetary Fund, annual reports of selected commercial banks and Banking and Financial Statistics published by Nepal Rastra Bank. This study has employed descriptive research design and causal comparative research design to deal with issues associated with the impact of market share, concentration, and efficiency on profitability of selected commercial banks. The relationship between dependent and independent variables are analyzed in single step and multi-step regression analysis. Return on assets, net interest margin and return on equity are the dependent variables, whereas market share, Concentration ratio, Herfindahl - Hirschman index, efficiency, firm size, age of the firm and inflation are independent variables.
The result shows that average return on asset is highest for GIB (2.93 percent) and lowest for MBL (0.65 percent). The average return on equity is higher for GIB (31.09 percent) and lowest for MBL (7.69 percent). The average market share is highest for NABIL (6.70 percent) and lowest for GIB (1.15 percent). The Herfindahl - Hirschman index is highest for the year 2010 of 18.33 percent and lowest for the year 2008 of 6.82 percent. The concentration ratio shows that it is highest for the year 2008 of 48 percent and lowest for the year 2012 of 30 percent. The average efficiency is highest for GIB 0.99) and lowest is for NSBI (0.72). NIBL has highest average firm size (Rs. 71.09 Billion) and GIB has lowest of (Rs. 12.69 Billion). The average age is highest for NABIL (28.50 years) and lowest for PCB, SUBL and NMB (4.5 years).The inflation shows that it is highest for the year 2009 of 12.6 percent.
The descriptive statistics for selected commercial bank shows that mean return on assets, net interest margin, return on equity, Market share, Herfindahl - Hirschman index, concentration ratio, firm size, age of the firm and inflation are 1.73 percent,19.14 percent, 3.39 percent, 3.35 percent, 4.88 percent, 37.5 percent, 0.91, Rs. 36.28 Billion, 14.67 years and 9.13 percent respectively.
The study of selected commercial bank shows that market share, concentration, efficiency, firm size and age of the firm are positivity correlated to bank performance where as inflation is negatively correlated.
The regression analysis reveals that market share and concentration have positive and significant impact on performance of Nepalese commercial banks measured in term of ROA, and ROE. This indicates that increase in these variables leads to increase in profitability of Nepalese commercial banks. Similarly, beta coefficient is positive for efficiency. However, coefficients are not significant. This indicates that efficiency of Nepalese commmercial banks has no impact on the performance. Overall, the result shows that the efficiency structure hypothesis is not accepted rather the significant beta coefficient of concentration and positive coefficients of market share shows that SCP hypothesis is explaining the profitability of Nepalese commercial banks.
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Barcode Call number Media type Location Section Status 587/D MIS Books Uniglobe Library Social Sciences Available The impact of net interest margin, market power and diversification strategy on banking stability of Nepalese commercial banks / Samjhana Giri
Title : The impact of net interest margin, market power and diversification strategy on banking stability of Nepalese commercial banks Material Type: printed text Authors: Samjhana Giri, Author Publication Date: 2017 Languages : English Descriptors: Banks
Banks and banking
Economic development
InterestClass number: 330 Abstract: The banking industry plays a major role in the business of financial intermediation
and has grown over the years with the diversity and complexity of its operations.
Financial stability is a system that can be characterized as stability in the absence of
excessive volatility and stress or crises. In others words, it can be defined as a
condition in which the financial system- comprising financial intermediaries, markets
and market infrastructure -is capable of withstanding shocks and the unraveling of
financial imbalances. It therefore mitigates the likelihood of disruptions in the
financial intermediation process which are severe enough to significantly impair the
allocation of savings to profitable investment.
This study attempts to examine the impact of net interest margin, market power and
diversification strategy on banking stability of Nepalese commercial banks. The
study is based on secondary data of 20 commercial banks with 140 observations for
the period of 2009/10 to 2015/16. The data are collected from the Banking and
Financial Statistics, Bank Supervision Report, and Quarterly Economic Bulletin
published by Nepal Rastra Bank and annual reports of selected commercial banks.
The regression models are estimated to test the significance and importance of net
interest margin, market power, diversification, and banking stability of Nepalese
commercial banks.
The result shows that average Z-score of return on assets is highest for SCBL (7.701)
and lowest for MBL (1.339), Z-score of return on equity is highest for NABIL (8.542)
and lowest for MBL (1.197), net interest margin is highest for ADBL (6.12 percent)
and lowest for NSBI (2.56 percent), average Herfindahl-Hirschman Index (HHI) of
market power and bank concentration ratio is same for all commercial bank (0.033
and 0.018 respectively), average noninterest income is highest for NABIL (Rs. 1.091
billion) and lowest for NCC (Rs. 0.18 billion), average Herfindahl-Hirschman Index–
HHI for business sector loan portfolio is highest for NSBI (0.59) and lowest for NMB
(0.33), average total assets is highest for NABIL (Rs. 83.30 billion) and lowest for
NCC (Rs. 22.72 billion), average loan to total assets ratio is highest for SIBL (Rs.
71.28 Billion) and lowest for SCBL (45.43 percent).
viii
The descriptive statistics for selected commercial bank shows that that Z-score of
return on assets ranges from a minimum of 1.32 to a maximum of 7.76 leading to an
average of 4.35. The average Z-score of return on equity of selected banks during the
study period is noticed to be 4.17 with a minimum of 1.20 and a maximum of 8.54.
The correlation matrix shows that there is a positive relationship of net interest
margin with banking stability (ZROA and ZROE). This indicates higher the net interest
margin, higher would be the banking stability. The result also shows that loan
concentration ratio (diversification), HHISFOC, is negatively related to the banking
stability (ZROA and ZROE). This indicates that higher the concentration of loans (less
diversified), lower would be the banking stability. The concentration ratios of
Nepalese banking industry (HHITA and CR3) are found to be positively related to the
ZROA and ZROE. Similarly, the result shows that total assets of the bank is positively
related to the banking stability (ZROA and ZROE). This indicates that higher the total
assets, higher would be the banking stability. However, the correlation matrix shows
that loan to total assets is negatively related to the banking stability (ZROA and ZROE).
It indicates that the more the total assets of a bank are occupied by loans or thelesser
the diversification, the lower would be the banking stability.
The regression analysis shows that there is a positive relationship between net
interest margin and banking stability(Z-score). It indicates that higher the net interest
margin, higher would be the banking stability. However, the study shows that loan
concentration ratio (HHISFOC) has a negative relationship with banking stability. It
indicates that higher the concentration of loan to a single sector (or lower the
diversification of loan), lower would be the banking stability (Z-score). Similarly, the
results show that diversification in terms of non-interest income is positively related
to the banking stability (ZROA). It indicates that higher the non-interest income,
higher would be the banking stability (ZROA). Likewise, the results show that market
power in terms of HHIloan and three bank concentration ratio (CR3) has a positive
relationship with banking stability (ZROE). This indicates that higher the
concentration ratio, higher would be the banking stability (ZROE).
Similarly, results show that control variables, total assets and loan to total assets,
show mixed results with banking stability. The result shows that total assets are
positively related to the banking stability. This indicates that larger the bank in terms
ix
of total assets, higher would be the banking stability. However, the results show that
loan to total assets ratio shows negative relationship with banking stability. The
regression results also show that beta coefficients are positive for concentration ratio
and total assets. However, the coefficients are negative for loan concentration ratio
(HHISFOC). Yet, the coefficients are significant only for loan concentration ratio and
total assets. Thus, the study concludes that loan diversification and total assets are
the major factors affecting banking stability of Nepalese commercial banks.The impact of net interest margin, market power and diversification strategy on banking stability of Nepalese commercial banks [printed text] / Samjhana Giri, Author . - 2017.
Languages : English
Descriptors: Banks
Banks and banking
Economic development
InterestClass number: 330 Abstract: The banking industry plays a major role in the business of financial intermediation
and has grown over the years with the diversity and complexity of its operations.
Financial stability is a system that can be characterized as stability in the absence of
excessive volatility and stress or crises. In others words, it can be defined as a
condition in which the financial system- comprising financial intermediaries, markets
and market infrastructure -is capable of withstanding shocks and the unraveling of
financial imbalances. It therefore mitigates the likelihood of disruptions in the
financial intermediation process which are severe enough to significantly impair the
allocation of savings to profitable investment.
This study attempts to examine the impact of net interest margin, market power and
diversification strategy on banking stability of Nepalese commercial banks. The
study is based on secondary data of 20 commercial banks with 140 observations for
the period of 2009/10 to 2015/16. The data are collected from the Banking and
Financial Statistics, Bank Supervision Report, and Quarterly Economic Bulletin
published by Nepal Rastra Bank and annual reports of selected commercial banks.
The regression models are estimated to test the significance and importance of net
interest margin, market power, diversification, and banking stability of Nepalese
commercial banks.
The result shows that average Z-score of return on assets is highest for SCBL (7.701)
and lowest for MBL (1.339), Z-score of return on equity is highest for NABIL (8.542)
and lowest for MBL (1.197), net interest margin is highest for ADBL (6.12 percent)
and lowest for NSBI (2.56 percent), average Herfindahl-Hirschman Index (HHI) of
market power and bank concentration ratio is same for all commercial bank (0.033
and 0.018 respectively), average noninterest income is highest for NABIL (Rs. 1.091
billion) and lowest for NCC (Rs. 0.18 billion), average Herfindahl-Hirschman Index–
HHI for business sector loan portfolio is highest for NSBI (0.59) and lowest for NMB
(0.33), average total assets is highest for NABIL (Rs. 83.30 billion) and lowest for
NCC (Rs. 22.72 billion), average loan to total assets ratio is highest for SIBL (Rs.
71.28 Billion) and lowest for SCBL (45.43 percent).
viii
The descriptive statistics for selected commercial bank shows that that Z-score of
return on assets ranges from a minimum of 1.32 to a maximum of 7.76 leading to an
average of 4.35. The average Z-score of return on equity of selected banks during the
study period is noticed to be 4.17 with a minimum of 1.20 and a maximum of 8.54.
The correlation matrix shows that there is a positive relationship of net interest
margin with banking stability (ZROA and ZROE). This indicates higher the net interest
margin, higher would be the banking stability. The result also shows that loan
concentration ratio (diversification), HHISFOC, is negatively related to the banking
stability (ZROA and ZROE). This indicates that higher the concentration of loans (less
diversified), lower would be the banking stability. The concentration ratios of
Nepalese banking industry (HHITA and CR3) are found to be positively related to the
ZROA and ZROE. Similarly, the result shows that total assets of the bank is positively
related to the banking stability (ZROA and ZROE). This indicates that higher the total
assets, higher would be the banking stability. However, the correlation matrix shows
that loan to total assets is negatively related to the banking stability (ZROA and ZROE).
It indicates that the more the total assets of a bank are occupied by loans or thelesser
the diversification, the lower would be the banking stability.
The regression analysis shows that there is a positive relationship between net
interest margin and banking stability(Z-score). It indicates that higher the net interest
margin, higher would be the banking stability. However, the study shows that loan
concentration ratio (HHISFOC) has a negative relationship with banking stability. It
indicates that higher the concentration of loan to a single sector (or lower the
diversification of loan), lower would be the banking stability (Z-score). Similarly, the
results show that diversification in terms of non-interest income is positively related
to the banking stability (ZROA). It indicates that higher the non-interest income,
higher would be the banking stability (ZROA). Likewise, the results show that market
power in terms of HHIloan and three bank concentration ratio (CR3) has a positive
relationship with banking stability (ZROE). This indicates that higher the
concentration ratio, higher would be the banking stability (ZROE).
Similarly, results show that control variables, total assets and loan to total assets,
show mixed results with banking stability. The result shows that total assets are
positively related to the banking stability. This indicates that larger the bank in terms
ix
of total assets, higher would be the banking stability. However, the results show that
loan to total assets ratio shows negative relationship with banking stability. The
regression results also show that beta coefficients are positive for concentration ratio
and total assets. However, the coefficients are negative for loan concentration ratio
(HHISFOC). Yet, the coefficients are significant only for loan concentration ratio and
total assets. Thus, the study concludes that loan diversification and total assets are
the major factors affecting banking stability of Nepalese commercial banks.Hold
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Barcode Call number Media type Location Section Status 397/D 330 GIR Books Uniglobe Library Social Sciences Available The impact of remittance on consumption and investment : a case of province five of Nepal / Sunita Dhakal
Title : The impact of remittance on consumption and investment : a case of province five of Nepal Material Type: printed text Authors: Sunita Dhakal, Author Publication Date: 2018 Pagination: 112p. Size: GRP/Thesis Accompanying material: 12/B Languages : English Abstract: Remittance is the amount of money transfers from international migrants to family members in their homeland. This is one of the major sources of financial flows to developing countries. Remittance is different from other external capital inflow like foreign direct investments, foreign loans and grants because of its stable nature (Chamiet al., 2005). Remittance is an important source of finance into the Nepal. When remittance is compared to other sources such as Foreign Direct Investment (FDI), Private Capital Flows (PCF), and Official Development Assistance (ODA) it is significantly higher. The remittance to GDP ratio is 26.9 percent in 2017 (Economic Survey, 2017/18).According to World Bank reports, total amount of remittance received by Nepal in 2017 was Rs. 699 billion.
There are various studies dealing with the relationship between remittances, economic growth and poverty alleviation are of greater importance. Though there are findings in the context of different countries, no such findings using more recent data exist in the context of province level of Nepal. Hence, this study focuses on the impact of remittances on consumption and investment of province five Nepal.
The major purpose of the study is to investigate the impact of remittances on consumption and investment in the case of province five of Nepal.This study is based on primary sources of data. The primary data were used to extract the information from the respondent regarding the use of remittance and impact of remittance on consumption and investment of individual household from family of Rupandehi, Dang and Rolpa districts of province five of Nepal whose family member has been working out of country.For theanalysis of impact of remittance on consumption and investment of people from province five,questionnaires were distributed to the respondents and 570 of total responses were collected via email and manually. Descriptive statistics, correlation coefficient and regression analysis has been applied to estimate the relationship between dependent variables consumption and investment and independent variables remittance, domestic income, household size, residency area and level of education. SPSS statistics package has been used to process the collected data.
The majority of respondents are male (54.40 percent) and the rest of the respondents are female i.e. (45.60 percent). This shows that results obtained from the analysis represent more to the opinion of male.In terms of age, highest portion of respondents are from the age group 20-30 years (41.10 percent) followed by age group below 20 years (29.6 percent), age group of 30-40 years (19.5 percent), age group of 40-50 years (6.3 percent) and age group above 50 years (3.5 percent). The majority of the respondents have below 4 members in a family i.e. 54.90 percent of total respondents. Similarly, 26.89 percent of total respondents have 4-7 members in their family followed by 7-10 member of family (16.10 percent), above 10 members in their family (2.1 percent) of the total respondents.The majority of respondents are from rural area (58.40 percent) and rest of the respondents is from rural area which is only 41.60 percent. This indicates that the result from the data analysis is more focus on rural area of the province five of Nepal.
The majority of the respondents have below Rs. 5 lakhsof total domestic income (50.90 percent) followed by domestic income of above Rs. 15 lakhs(21.60 percent), income group of Rs. 5 – 10 lakh (19.50 percent) and income group of Rs. 10-15 lakh (8.10 percent) of the total respondents. The majority of the respondents received bellow Rs. 5 lakh annual amount of remittance from abroad (52.30 percent) of total respondents. The majority of the respondents i.e. 57.40 percent of respondents are investing in bullion market below 20 percent of total remittance they received from abroad followed by 28.20 percent are investing in between 20-30 percent, 8.20 percent investing 30-40 percent, 4.20 percent are investing 40-50 percent and 2.00 percent are investing above 50 percent of their total remittance in bullion markets. The majority of respondent’s i.e.437 respondents are spending below Rs.1 lakh of total remittance they received from abroad which makes up 76.70 percent. This indicates that majority of people are spending only few amounts of money for entertainment purpose.
The higher portion of respondent’s i.e. 45.30percent of respondents are spending on education below Rs.1 lakh of total remittance they received from abroad which makes up 45.30 percent. Similarly, 29.30 percent of the respondents are spending about Rs. 1-2 lakh of total remittance amount. Likewise, 9.80 percent of the respondents are spending Rs. 3-4 lakh on education followed by 9.80 percent of respondent spend about Rs.3– 4 lakh and 7.70 percent spend on education service respectively.
The major conclusion of the study is that a total remittance inflow significantly affects both consumption and investment of people of province five of Nepal. It indicates that higher the flow of remittance money, higher would be consumption and investment ratio. Total amount of remittance inflow, annual domestic income and household size are the major influencing factor of consumption. Likewise, total amount of remittance inflow, annual domestic income and level of education are the major influencing factor of investment decision of people from province five of Nepal. Similarly, family system and residential area of family are also important factor that affect both the consumption and investment decision.
The study also concludes that the family having urban area residency are more aware of spending on consumption and investment on different alternative in comparison of rural area. The study result also reveals that educated families are serious about use of their money received as a remittance. Thus, there is positive impact of education on consumption and investment.
This studyanalyzed the impact of remittance on consumption and investment of people from province five of Nepal. The study has recommended that the study observed significantly positive impact of remittance inflow on consumption of family. Hence, in order to maintain living standard of a family the family member should appropriately manage remittance money. Similarly, the study also observed positive impact of remittance inflow on investment behavior of family. Therefore,in order to maintain investment portfolio, family member should utilize remittance money in a suitable investment portfolio.
The impact of remittance on consumption and investment : a case of province five of Nepal [printed text] / Sunita Dhakal, Author . - 2018 . - 112p. ; GRP/Thesis + 12/B.
Languages : English
Abstract: Remittance is the amount of money transfers from international migrants to family members in their homeland. This is one of the major sources of financial flows to developing countries. Remittance is different from other external capital inflow like foreign direct investments, foreign loans and grants because of its stable nature (Chamiet al., 2005). Remittance is an important source of finance into the Nepal. When remittance is compared to other sources such as Foreign Direct Investment (FDI), Private Capital Flows (PCF), and Official Development Assistance (ODA) it is significantly higher. The remittance to GDP ratio is 26.9 percent in 2017 (Economic Survey, 2017/18).According to World Bank reports, total amount of remittance received by Nepal in 2017 was Rs. 699 billion.
There are various studies dealing with the relationship between remittances, economic growth and poverty alleviation are of greater importance. Though there are findings in the context of different countries, no such findings using more recent data exist in the context of province level of Nepal. Hence, this study focuses on the impact of remittances on consumption and investment of province five Nepal.
The major purpose of the study is to investigate the impact of remittances on consumption and investment in the case of province five of Nepal.This study is based on primary sources of data. The primary data were used to extract the information from the respondent regarding the use of remittance and impact of remittance on consumption and investment of individual household from family of Rupandehi, Dang and Rolpa districts of province five of Nepal whose family member has been working out of country.For theanalysis of impact of remittance on consumption and investment of people from province five,questionnaires were distributed to the respondents and 570 of total responses were collected via email and manually. Descriptive statistics, correlation coefficient and regression analysis has been applied to estimate the relationship between dependent variables consumption and investment and independent variables remittance, domestic income, household size, residency area and level of education. SPSS statistics package has been used to process the collected data.
The majority of respondents are male (54.40 percent) and the rest of the respondents are female i.e. (45.60 percent). This shows that results obtained from the analysis represent more to the opinion of male.In terms of age, highest portion of respondents are from the age group 20-30 years (41.10 percent) followed by age group below 20 years (29.6 percent), age group of 30-40 years (19.5 percent), age group of 40-50 years (6.3 percent) and age group above 50 years (3.5 percent). The majority of the respondents have below 4 members in a family i.e. 54.90 percent of total respondents. Similarly, 26.89 percent of total respondents have 4-7 members in their family followed by 7-10 member of family (16.10 percent), above 10 members in their family (2.1 percent) of the total respondents.The majority of respondents are from rural area (58.40 percent) and rest of the respondents is from rural area which is only 41.60 percent. This indicates that the result from the data analysis is more focus on rural area of the province five of Nepal.
The majority of the respondents have below Rs. 5 lakhsof total domestic income (50.90 percent) followed by domestic income of above Rs. 15 lakhs(21.60 percent), income group of Rs. 5 – 10 lakh (19.50 percent) and income group of Rs. 10-15 lakh (8.10 percent) of the total respondents. The majority of the respondents received bellow Rs. 5 lakh annual amount of remittance from abroad (52.30 percent) of total respondents. The majority of the respondents i.e. 57.40 percent of respondents are investing in bullion market below 20 percent of total remittance they received from abroad followed by 28.20 percent are investing in between 20-30 percent, 8.20 percent investing 30-40 percent, 4.20 percent are investing 40-50 percent and 2.00 percent are investing above 50 percent of their total remittance in bullion markets. The majority of respondent’s i.e.437 respondents are spending below Rs.1 lakh of total remittance they received from abroad which makes up 76.70 percent. This indicates that majority of people are spending only few amounts of money for entertainment purpose.
The higher portion of respondent’s i.e. 45.30percent of respondents are spending on education below Rs.1 lakh of total remittance they received from abroad which makes up 45.30 percent. Similarly, 29.30 percent of the respondents are spending about Rs. 1-2 lakh of total remittance amount. Likewise, 9.80 percent of the respondents are spending Rs. 3-4 lakh on education followed by 9.80 percent of respondent spend about Rs.3– 4 lakh and 7.70 percent spend on education service respectively.
The major conclusion of the study is that a total remittance inflow significantly affects both consumption and investment of people of province five of Nepal. It indicates that higher the flow of remittance money, higher would be consumption and investment ratio. Total amount of remittance inflow, annual domestic income and household size are the major influencing factor of consumption. Likewise, total amount of remittance inflow, annual domestic income and level of education are the major influencing factor of investment decision of people from province five of Nepal. Similarly, family system and residential area of family are also important factor that affect both the consumption and investment decision.
The study also concludes that the family having urban area residency are more aware of spending on consumption and investment on different alternative in comparison of rural area. The study result also reveals that educated families are serious about use of their money received as a remittance. Thus, there is positive impact of education on consumption and investment.
This studyanalyzed the impact of remittance on consumption and investment of people from province five of Nepal. The study has recommended that the study observed significantly positive impact of remittance inflow on consumption of family. Hence, in order to maintain living standard of a family the family member should appropriately manage remittance money. Similarly, the study also observed positive impact of remittance inflow on investment behavior of family. Therefore,in order to maintain investment portfolio, family member should utilize remittance money in a suitable investment portfolio.
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Barcode Call number Media type Location Section Status 525/D DHA Books Uniglobe Library Social Sciences Available The impact of risk and competition on bank profitability of Nepalese commercial banks / Salina Bhattarai
Title : The impact of risk and competition on bank profitability of Nepalese commercial banks Material Type: printed text Authors: Salina Bhattarai, Author Publication Date: 2018 Pagination: 99p. Size: GRP/Thesis Accompanying material: 12/B Languages : English Abstract: Banks primarily involve in financial intermediation activities in an economy. The banking industry has been more complex worldwide over the years because of rapid development and growth of financial security market. Minimizing risk and maintaining competition simultaneously has always been a challenge for the banks as well as the regulatory bodies in the banking industry.The liberalization in the Nepalese economy has caused stiff competition within the banking industry. The banks are facing direct competition from financial markets and the development of disintermediation and financial innovation. Competition has the usual efficiency benefits in banking of reducing allocated and productive deadweight losses as well as fostering innovation. Similarly, regulatory measures in the monetary policy are important in preserving the sound financial stability in the banking sector. Liquidity management means ensuring that the bank possesses sufficient cash to satisfy unexpected cash outlets. If the bank is unable to do this it is known as the liquidity risk. As this risk increases, the bank is considered unable to meet its obligations (such as deposits withdrawal, debt maturity and funds for loan portfolio and investment).
As an important part of the financial system, the banking sector plays a more important role in the development of nation's economy. Several rounds of banking reforms create a more competitive environment and improve the bank profitability. Risk implies future uncertainty about deviation from expected earnings or expected outcome. the nature of competition and risk in banking is important given the prominent role banks play in the allocation of resources, the provision of capital to the economy and the stability of the financial system. Moreover, these roles in turn, have an effect on bank performance and wider economic growth and stability.
This study attempts to observe the impact of risk and competition of Nepalese commercial banks. The study is based on the secondary data which are gathered for 19 commercial banks in Nepal for the period of 8 years form 2009/10 to 2016/17. The main sources of data are banking and financial statistics published by Nepal Rastra Bank, annual reports of different sample banks, and supervision report of Nepal Rastra Bank. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between risk and competition on bank profitability in Nepalese commercial banks.The result reveals that average return on equity.
The result shows that average return on assets is highest for is highest for the NBBL (3.25 percent) and lowest for MBL (0.85 percent).The average return on equity is highest for highest for the EBL (47.19 percent) and lowest for MBL(10.10 percent). The average liquidity ratio is highest for GIBL (33.54 percent) and lowest for HML(7.23 percent). The average leverage is highest for NSBI (12.54 times) and lowest for GIBL(3.91 times).the average capital adequacy ratio is highest for GIBL (31.78 percent) and lowest for ABL(11.33 percent).the average HHI is highest for ADBL 0.76 and lowest for HBL (0.54).The average market price of share is highest for SCBL (Rs. 2238 per share) and lowest for NCC(Rs. 155 per share). The average numberof branches is highest for ADBL (195.86 branches) and lowest for GIBL (76.14 branches).
The descriptive statistics for selected commercial bank shows that the average return on equity, return on assets, liquidity ratio, capital adequacy ratio, leverage, HHI, numberof branches, market price of share, foreign ownership are 22.30 percent, 1.73 percent,16.09 percent, 14.64 percent, 9.27 times,0.64 ,3.59 branches,703.87 per share, 0.26 respectively for selected commercial banks.
The correlation matrix shows that liquidity ratio,capital adequacy ratio and HHI are negatively correlated to return on equity.However,leverage, numberof branches, market price of share, foreignownership has positive relationship with return on equity. Likewise, capital adequacy ratio leverage, and HHI are negatively correlated to return on assets. However, liquidityratio numberof branches, market price of share, foreign ownership is positively correlated to return on assets.
The regression result revealed that market price of share numberof branches, foreign ownership has positive and significant impact on return on assets which indicates that higher the market price of share, numberof branches, and foreign ownership higher would be the be return on assets. However, leverage has significant negative impact on return on assets. It indicates that higher the leverage lower would the return on assets. Similarly, Liquidity ratio and capital adequacy ratio has negative impact on return on assets.It indicates that higher the liquidity ratio and capital adequacy ratio lower would be the return on assets.Likewise,market price of share, numberof branches, foreignownership has positive and significant impact on return on equity.It indicates that higher the market price of share,number of branches,and foreign ownership lower would be the return on equity.Similarly,HHI has positive impact on return on equity.it indicates that higher the HHI higher will be the return on equity.However, Capital adequacy ratio and liquidity ratio has negative impact on return on equity.It indicates that higher the return liquidity ratio and capital adequacy ratio lower would be the return on equity.
The impact of risk and competition on bank profitability of Nepalese commercial banks [printed text] / Salina Bhattarai, Author . - 2018 . - 99p. ; GRP/Thesis + 12/B.
Languages : English
Abstract: Banks primarily involve in financial intermediation activities in an economy. The banking industry has been more complex worldwide over the years because of rapid development and growth of financial security market. Minimizing risk and maintaining competition simultaneously has always been a challenge for the banks as well as the regulatory bodies in the banking industry.The liberalization in the Nepalese economy has caused stiff competition within the banking industry. The banks are facing direct competition from financial markets and the development of disintermediation and financial innovation. Competition has the usual efficiency benefits in banking of reducing allocated and productive deadweight losses as well as fostering innovation. Similarly, regulatory measures in the monetary policy are important in preserving the sound financial stability in the banking sector. Liquidity management means ensuring that the bank possesses sufficient cash to satisfy unexpected cash outlets. If the bank is unable to do this it is known as the liquidity risk. As this risk increases, the bank is considered unable to meet its obligations (such as deposits withdrawal, debt maturity and funds for loan portfolio and investment).
As an important part of the financial system, the banking sector plays a more important role in the development of nation's economy. Several rounds of banking reforms create a more competitive environment and improve the bank profitability. Risk implies future uncertainty about deviation from expected earnings or expected outcome. the nature of competition and risk in banking is important given the prominent role banks play in the allocation of resources, the provision of capital to the economy and the stability of the financial system. Moreover, these roles in turn, have an effect on bank performance and wider economic growth and stability.
This study attempts to observe the impact of risk and competition of Nepalese commercial banks. The study is based on the secondary data which are gathered for 19 commercial banks in Nepal for the period of 8 years form 2009/10 to 2016/17. The main sources of data are banking and financial statistics published by Nepal Rastra Bank, annual reports of different sample banks, and supervision report of Nepal Rastra Bank. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between risk and competition on bank profitability in Nepalese commercial banks.The result reveals that average return on equity.
The result shows that average return on assets is highest for is highest for the NBBL (3.25 percent) and lowest for MBL (0.85 percent).The average return on equity is highest for highest for the EBL (47.19 percent) and lowest for MBL(10.10 percent). The average liquidity ratio is highest for GIBL (33.54 percent) and lowest for HML(7.23 percent). The average leverage is highest for NSBI (12.54 times) and lowest for GIBL(3.91 times).the average capital adequacy ratio is highest for GIBL (31.78 percent) and lowest for ABL(11.33 percent).the average HHI is highest for ADBL 0.76 and lowest for HBL (0.54).The average market price of share is highest for SCBL (Rs. 2238 per share) and lowest for NCC(Rs. 155 per share). The average numberof branches is highest for ADBL (195.86 branches) and lowest for GIBL (76.14 branches).
The descriptive statistics for selected commercial bank shows that the average return on equity, return on assets, liquidity ratio, capital adequacy ratio, leverage, HHI, numberof branches, market price of share, foreign ownership are 22.30 percent, 1.73 percent,16.09 percent, 14.64 percent, 9.27 times,0.64 ,3.59 branches,703.87 per share, 0.26 respectively for selected commercial banks.
The correlation matrix shows that liquidity ratio,capital adequacy ratio and HHI are negatively correlated to return on equity.However,leverage, numberof branches, market price of share, foreignownership has positive relationship with return on equity. Likewise, capital adequacy ratio leverage, and HHI are negatively correlated to return on assets. However, liquidityratio numberof branches, market price of share, foreign ownership is positively correlated to return on assets.
The regression result revealed that market price of share numberof branches, foreign ownership has positive and significant impact on return on assets which indicates that higher the market price of share, numberof branches, and foreign ownership higher would be the be return on assets. However, leverage has significant negative impact on return on assets. It indicates that higher the leverage lower would the return on assets. Similarly, Liquidity ratio and capital adequacy ratio has negative impact on return on assets.It indicates that higher the liquidity ratio and capital adequacy ratio lower would be the return on assets.Likewise,market price of share, numberof branches, foreignownership has positive and significant impact on return on equity.It indicates that higher the market price of share,number of branches,and foreign ownership lower would be the return on equity.Similarly,HHI has positive impact on return on equity.it indicates that higher the HHI higher will be the return on equity.However, Capital adequacy ratio and liquidity ratio has negative impact on return on equity.It indicates that higher the return liquidity ratio and capital adequacy ratio lower would be the return on equity.
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Barcode Call number Media type Location Section Status 482/D BHA Thesis/Dissertation Uniglobe Library Social Sciences Available The influence of exchange rate fluctuation on financial performance of Nepalese commercial banks / Rupesh Kumar Chaudhary
Title : The influence of exchange rate fluctuation on financial performance of Nepalese commercial banks Material Type: printed text Authors: Rupesh Kumar Chaudhary, Author Publication Date: 2018 Pagination: 87p. Size: Books Accompanying material: 9/B Languages : English Descriptors: Interest rates Class number: 332.809 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. 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. The choice of exchange rate is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The effects of exchange rate fluctuation on financial performance of Nepalese commercial banks are studied extensively in different period of time. In regards to the influence of exchange rate fluctuation on financial performance of commercial banks, different results are found. Some of the studies state that, there is a country where exchange rate fluctuation affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of exchange rate fluctuation and bank profitability.
Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on exchange rate fluctuation and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of exchange rate fluctuation and some bank specific variables on performance of Nepalese banks.
The results in the prior studies on exchange rate fluctuation and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the exchange rate fluctuation and performance of Nepalese commercial banks. For this, the sample of 20 commercial banks with data of 6 years from 2010 to 2015 has been taken. Data has been collected from various secondary sources like annual reports of
viii
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 performance measures like return on assets (ROA), earnings per share (EPS) and net interest margin (NIM) of the banks have been used as the dependent variable. Exchange rate, interest rate, inflation rate, gross domestic product and external debt have been considered as independent variables.
The study recommends that the exposure to risk comes from other diverse areas; such as avoidance of risk, forecasting in exchange rates movement for profit, spot transaction, protection against exchange rates fluctuation and effective and efficient use of risk trading. Stringent control measures and administrative bottle necks of the Central Bank of Nepal are considered as the major factors hindering the achievement of sound exchange policies. Conclusively foreign exchange can be regarded as the life wire of a national economic growth and development and even the life blood of any economic development. The issues related to foreign exchange trading should always be taken into account in efforts to improve banks’ foreign exchange transactions and financial performance. It is important that the Government addresses the issue of weakening local currency since this triggers instability in the financial sector through negative impact on trade balance, higher external debt service and foreign reserves.The influence of exchange rate fluctuation on financial performance of Nepalese commercial banks [printed text] / Rupesh Kumar Chaudhary, Author . - 2018 . - 87p. ; Books + 9/B.
Languages : English
Descriptors: Interest rates Class number: 332.809 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. 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. The choice of exchange rate is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The effects of exchange rate fluctuation on financial performance of Nepalese commercial banks are studied extensively in different period of time. In regards to the influence of exchange rate fluctuation on financial performance of commercial banks, different results are found. Some of the studies state that, there is a country where exchange rate fluctuation affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of exchange rate fluctuation and bank profitability.
Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on exchange rate fluctuation and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of exchange rate fluctuation and some bank specific variables on performance of Nepalese banks.
The results in the prior studies on exchange rate fluctuation and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the exchange rate fluctuation and performance of Nepalese commercial banks. For this, the sample of 20 commercial banks with data of 6 years from 2010 to 2015 has been taken. Data has been collected from various secondary sources like annual reports of
viii
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 performance measures like return on assets (ROA), earnings per share (EPS) and net interest margin (NIM) of the banks have been used as the dependent variable. Exchange rate, interest rate, inflation rate, gross domestic product and external debt have been considered as independent variables.
The study recommends that the exposure to risk comes from other diverse areas; such as avoidance of risk, forecasting in exchange rates movement for profit, spot transaction, protection against exchange rates fluctuation and effective and efficient use of risk trading. Stringent control measures and administrative bottle necks of the Central Bank of Nepal are considered as the major factors hindering the achievement of sound exchange policies. Conclusively foreign exchange can be regarded as the life wire of a national economic growth and development and even the life blood of any economic development. The issues related to foreign exchange trading should always be taken into account in efforts to improve banks’ foreign exchange transactions and financial performance. It is important that the Government addresses the issue of weakening local currency since this triggers instability in the financial sector through negative impact on trade balance, higher external debt service and foreign reserves.Hold
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Barcode Call number Media type Location Section Status 415/D 332.809 CHA Thesis/Dissertation Uniglobe Library Social Sciences Available The lexus and the olive tree / Friedman, Thomas L.
Title : The lexus and the olive tree Material Type: printed text Authors: Friedman, Thomas L., Author Publisher: Ancor books nt Publication Date: 2000 Pagination: 458p Price: Rs.920 Languages : English Descriptors: Capitalism - Social aspects
Free trade
GlobalizationKeywords: 'technological innovations economic aspects free trade' Class number: 337 The lexus and the olive tree [printed text] / Friedman, Thomas L., Author . - [S.l.] : Ancor books nt, 2000 . - 458p.
Rs.920
Languages : English
Descriptors: Capitalism - Social aspects
Free trade
GlobalizationKeywords: 'technological innovations economic aspects free trade' Class number: 337 Hold
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Barcode Call number Media type Location Section Status 6055 337 FRI Books Uniglobe Library Social Sciences Available The nature and scope of managerial economics / Peterson
Title : The nature and scope of managerial economics Material Type: printed text Authors: Peterson, Author Publisher: Delhi: Macmillan Languages : English Descriptors: Economics
Managerial economicsKeywords: 'economics managerial economics' Class number: 330 The nature and scope of managerial economics [printed text] / Peterson, Author . - [S.l.] : Delhi: Macmillan, [s.d.].
Languages : English
Descriptors: Economics
Managerial economicsKeywords: 'economics managerial economics' Class number: 330 Hold
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Barcode Call number Media type Location Section Status 4371 330 PET Books Uniglobe Library Social Sciences Available The Nepali dalit social movement / Kisan, Yam Bahadur
Title : The Nepali dalit social movement Material Type: printed text Authors: Kisan, Yam Bahadur, Author Publisher: Kathmandu: LRPS Nepal Publication Date: 2005 Pagination: 200p Size: Book Price: Rs.225 Languages : English Descriptors: Free trade
Protectionism
SocialismKeywords: 'socialism free trade protectionism' Class number: 335.412 The Nepali dalit social movement [printed text] / Kisan, Yam Bahadur, Author . - [S.l.] : Kathmandu: LRPS Nepal, 2005 . - 200p ; Book.
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Languages : English
Descriptors: Free trade
Protectionism
SocialismKeywords: 'socialism free trade protectionism' Class number: 335.412 Hold
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Barcode Call number Media type Location Section Status 1601 335.412 KIS Books Uniglobe Library Social Sciences Available 1602 335.412 KIS Books Uniglobe Library Social Sciences Available 1603 335.412 KIS Books Uniglobe Library Social Sciences Available 1604 335.412 KIS Books Uniglobe Library Social Sciences Available 1605 335.412 KIS Books Uniglobe Library Social Sciences Available The political economy of fiscal federalism... / Bhim Prasad Bhurtel
Title : The political economy of fiscal federalism... Material Type: printed text Authors: Bhim Prasad Bhurtel, Author Publisher: Kathmandu: NESCA Publication Date: 2009 Pagination: 216p Size: Books Languages : English Descriptors: Fiscal policy
Inter governmental fiscal relationsKeywords: 'fiscal policy nepal' Class number: 336.549 The political economy of fiscal federalism... [printed text] / Bhim Prasad Bhurtel, Author . - [S.l.] : Kathmandu: NESCA, 2009 . - 216p ; Books.
Languages : English
Descriptors: Fiscal policy
Inter governmental fiscal relationsKeywords: 'fiscal policy nepal' Class number: 336.549 Hold
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Barcode Call number Media type Location Section Status 1010 336.549 BHU Books Uniglobe Library Social Sciences Available 1011 336.549 BHU Books Uniglobe Library Social Sciences Available The relationship among capital adequacy, cost income ratio and performance of Nepalese commercial banks / Pratikshya Parajuli
Title : The relationship among capital adequacy, cost income ratio and performance of Nepalese commercial banks Material Type: printed text Authors: Pratikshya Parajuli, Author Publication Date: 2017 Pagination: 105p. Size: GRP/Thesis Accompanying material: 10/B Languages : English Descriptors: Bank loans
Capital adequacyClass number: 332.120 Abstract: Banking has become an important feature, which renders service to the people in financial matters, and its magnitude of action is extending day by day. Commercial banks are the heart of the economic system which accepts the deposits of million people, government and business units. Bank performance is the bank profitability and productivity in banking. The trend of commercial banking is changing rapidly. Due to the problem of profitability and stiff competition in the industry, commercial banks need strict regulations to enable quality improvement in order to gain or maintain competitive advantage and avoid elimination from the market. With the present global credit crunch, capital adequacy and cost income ratio being critical for banks, the present study examines the relationship between these variables and profitability. Capital adequacy plays crucial role for reducing different risk components in banking Industry, and it is necessary to reduce moral hazard and competitiveness. Furthermore, adequate capitalization is an important variable in business, banks must have enough capital to provide funds for its internal needs and for expansion, as well as ensure security for depositors. 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.
This study attempts to explore the relationship of capital adequacy and cost income ratio with performance of selected commercial banks in context of Nepal. This study is based on the secondary data for 20 commercial banks with 120 observations for the period of 2009/10 to 2014/15. 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, cost income ratio, equity capital to assets, debt to equity, liquidity ratio and bank size on financial performance of Nepalese commercial banks.
The result shows that average return on assets is highest for NABIL (7.29 percent) and lowest for MBL (0.32 percent). The average return on equity is highest for NABIL (35.18 percent) and lowest for NBL (-8.38 percent). The average net interest margin is highest for ADBL (6.13 percent) and lowest for SBI (2.43 percent). The average capital adequacy is highest for JBNL (27.37 percent) and lowest for RBB(-2.95 percent). The average cost to income ratio is highest for NBL (90.15 percent) and lowest for NIBL (25.45 percent). The average equity capital to total assets ratio is highest for JBNL (22.96 percent)and lowest for NBL (-2.90 percent). The average debt to equity ratio is highest for RBB (22.63 times)and lowest for NBL (-11.60 times). The average liquidity ratio is highest for JBNL (39.59 percent) and lowest for ADBL (9.70 percent). The average bank size is highest for RBB (114.59 billion) and lowest for JBNL (13.71 billion).
The descriptive statistics for selected commercial bank shows that the average return on assets, return on equity, net interest margin, capital adequacy, cost income ratio, equity capital to total assets, debt equity ratio, liquidity ratio and bank size are 1.88 percent, 17.85 percent, 3.32 percent, 10.30 percent, 43.49 percent, 7.77 percent, 10.18 times, 18.77 percent, and Rs. 48.55 billionrespectively.
The correlation matrix shows that debt to equity ratio and bank size are positively related to return on assets,whilecapital adequacy, cost income ratio, equity capital to total assets and liquidity ratio are negatively related to return on assets. The result states that capital adequacy, equity capital to total assets, debt to equity ratio and bank size has positive relationship with return on equity. However, cost income ratio and liquidity ratio have negative relationship with return on equity. On the other hand, cost income ratio and bank size is positively related to net interest margin, whereas capital adequacy,equity capital to total assets, debt to equity ratio and liquidity ratio are negatively related to net interest margin.
The regression analysis reveals that debt to equity ratio and bank size has positive impact on return on assets. This indicates that higher the debt to equity ratio and bank size, higher would bethe return on assets. However, capital adequacy, cost income ratio, equity capital to total assets, and liquidity ratio has negative impact on return on assets. This indicates that higher the capital adequacy,cost income ratio, equity capital to total assetsand liquidity ratio, lower would bethe return on assets.
On the other hand, capital adequacy, equity capital to total assets, debt to equity ratio and bank sizehas positive impact on return on equity. This indicates that higher the capital adequacy,equity capital to total assets, debt to equity ratio and bank size, higher would be the return on equity. However, the study reveals that cost income ratio and liquidity ratio has negative impact on return on equity. This indicates that higher the cost income ratio and liquidity ratio, lower would be the return on equity.
The study also shows that cost income ratio and bank size has positive impact on net interest margin. This reveals that higher thecost income ratio and bank size, higher would be the net interest margin. However, capital adequacy, equity capital to total assets, debt to equity ratio and liquidity ratiohas negative impact on net interest margin. This indicates that higher the capital adequacy,equity capital to total assets, debt to equity ratio and liquidity ratio, lower would be the net interest margin.
The relationship among capital adequacy, cost income ratio and performance of Nepalese commercial banks [printed text] / Pratikshya Parajuli, Author . - 2017 . - 105p. ; GRP/Thesis + 10/B.
Languages : English
Descriptors: Bank loans
Capital adequacyClass number: 332.120 Abstract: Banking has become an important feature, which renders service to the people in financial matters, and its magnitude of action is extending day by day. Commercial banks are the heart of the economic system which accepts the deposits of million people, government and business units. Bank performance is the bank profitability and productivity in banking. The trend of commercial banking is changing rapidly. Due to the problem of profitability and stiff competition in the industry, commercial banks need strict regulations to enable quality improvement in order to gain or maintain competitive advantage and avoid elimination from the market. With the present global credit crunch, capital adequacy and cost income ratio being critical for banks, the present study examines the relationship between these variables and profitability. Capital adequacy plays crucial role for reducing different risk components in banking Industry, and it is necessary to reduce moral hazard and competitiveness. Furthermore, adequate capitalization is an important variable in business, banks must have enough capital to provide funds for its internal needs and for expansion, as well as ensure security for depositors. 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.
This study attempts to explore the relationship of capital adequacy and cost income ratio with performance of selected commercial banks in context of Nepal. This study is based on the secondary data for 20 commercial banks with 120 observations for the period of 2009/10 to 2014/15. 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, cost income ratio, equity capital to assets, debt to equity, liquidity ratio and bank size on financial performance of Nepalese commercial banks.
The result shows that average return on assets is highest for NABIL (7.29 percent) and lowest for MBL (0.32 percent). The average return on equity is highest for NABIL (35.18 percent) and lowest for NBL (-8.38 percent). The average net interest margin is highest for ADBL (6.13 percent) and lowest for SBI (2.43 percent). The average capital adequacy is highest for JBNL (27.37 percent) and lowest for RBB(-2.95 percent). The average cost to income ratio is highest for NBL (90.15 percent) and lowest for NIBL (25.45 percent). The average equity capital to total assets ratio is highest for JBNL (22.96 percent)and lowest for NBL (-2.90 percent). The average debt to equity ratio is highest for RBB (22.63 times)and lowest for NBL (-11.60 times). The average liquidity ratio is highest for JBNL (39.59 percent) and lowest for ADBL (9.70 percent). The average bank size is highest for RBB (114.59 billion) and lowest for JBNL (13.71 billion).
The descriptive statistics for selected commercial bank shows that the average return on assets, return on equity, net interest margin, capital adequacy, cost income ratio, equity capital to total assets, debt equity ratio, liquidity ratio and bank size are 1.88 percent, 17.85 percent, 3.32 percent, 10.30 percent, 43.49 percent, 7.77 percent, 10.18 times, 18.77 percent, and Rs. 48.55 billionrespectively.
The correlation matrix shows that debt to equity ratio and bank size are positively related to return on assets,whilecapital adequacy, cost income ratio, equity capital to total assets and liquidity ratio are negatively related to return on assets. The result states that capital adequacy, equity capital to total assets, debt to equity ratio and bank size has positive relationship with return on equity. However, cost income ratio and liquidity ratio have negative relationship with return on equity. On the other hand, cost income ratio and bank size is positively related to net interest margin, whereas capital adequacy,equity capital to total assets, debt to equity ratio and liquidity ratio are negatively related to net interest margin.
The regression analysis reveals that debt to equity ratio and bank size has positive impact on return on assets. This indicates that higher the debt to equity ratio and bank size, higher would bethe return on assets. However, capital adequacy, cost income ratio, equity capital to total assets, and liquidity ratio has negative impact on return on assets. This indicates that higher the capital adequacy,cost income ratio, equity capital to total assetsand liquidity ratio, lower would bethe return on assets.
On the other hand, capital adequacy, equity capital to total assets, debt to equity ratio and bank sizehas positive impact on return on equity. This indicates that higher the capital adequacy,equity capital to total assets, debt to equity ratio and bank size, higher would be the return on equity. However, the study reveals that cost income ratio and liquidity ratio has negative impact on return on equity. This indicates that higher the cost income ratio and liquidity ratio, lower would be the return on equity.
The study also shows that cost income ratio and bank size has positive impact on net interest margin. This reveals that higher thecost income ratio and bank size, higher would be the net interest margin. However, capital adequacy, equity capital to total assets, debt to equity ratio and liquidity ratiohas negative impact on net interest margin. This indicates that higher the capital adequacy,equity capital to total assets, debt to equity ratio and liquidity ratio, lower would be the net interest margin.
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Barcode Call number Media type Location Section Status 312/D 332.120 PAR Thesis/Dissertation Uniglobe Library Social Sciences Available The relationship between banks deposit rate and deposit mobilization of Nepalese commercial banks / Anrud Kumar Yadav
Title : The relationship between banks deposit rate and deposit mobilization of Nepalese commercial banks Material Type: printed text Authors: Anrud Kumar Yadav, Author Publication Date: 2016 Pagination: 98p. Size: GRP/Thesis Accompanying material: 7/B Languages : English Abstract: The success of the banking sector greatly lies on the deposit mobilization. Mobilization of deposits is one of the important functions of banking business. It is an important source of fund for the banks. The commercial banks must tap deposits from urban and rural areas which helps the banks to provide large amount of funds to priority sectors for development (Shettar, 2014). The mobilization of deposits domestically is crucial in many developing countries. Domestic funds provide a cheap and reliable source of funds for development, which is of great value in developing countries, especially when the economy has difficulty in raising capital in international markets (Adams, 1978). The cost of savings mobilization depends not only on internal factors such as operational efficiency, but also on external factors such as minimum reserve requirements, tax rates and general market conditions (Ledgerwood, 1999). Bajracharya (1990) concludes that the mobilization of domestic saving is one of the important aspects of monetary policies in Nepal. For this purposes commercial banks stood as the vital and active financial intermediary for generating resources in the form of deposit of private sector which further can be used for providing credit to the investor in different aspects of economy.
The major objective of this study is to examine relationship between the interest rate on deposit and deposit mobilization by the commercial banks. The specific objectives are: a) To identify the structure and pattern of current deposit, fixed deposit, saving deposit, call deposit and other deposit in commercial banks of Nepal, b) To analyze the relationship between interest rate and deposit mobilization. c) To examine collective impact of inflation, deposit rate, interest rate margin and GDP on deposit mobilization in Nepalese commercial banks. d) To determine the major factors affecting the deposit mobilization of Nepalese commercial banks.
This study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted to undertake fact-finding operation searching for adequate information about the relationship between bank's deposit interest rate and deposit mobilization of Nepalese commercial banks. This study is based on the secondary data which are gathered from 20 commercial banks in Nepal. The total numbers of observations is 158. The main sources of data are supervision reports of Nepal Rastra Bank, Economic Survey and various annual reports of different commercial banks. The data are collected for current deposit, fixed deposit, saving deposit, call deposit, margin deposit, total deposit, inflation, deposit rate, interest rate margin, and gross domestic product. These data are collected for the period 2007- 2014.
The study reveals that inflation, interest rate margin and gross domestic product have positive relationship with all types of deposits (current deposit, fixed deposit, saving deposit, call deposit, margin deposit and total deposit). Deposit rate is negatively related to current deposit, saving deposit, margin deposit and total deposit, whereas deposit rate is positively related with fixed deposit and call deposit. The regression result revealed that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with current deposit. It indicates that inflation, interest rate margin and GDP have positive impact on current deposit. The beta coefficient is negative for the deposit rate with current deposit. Similarly, the beta coefficient for inflation, deposit rate, interest rate margin and gross domestic product are positive with fixed deposit. Likewise, the beta coefficient for inflation, interest rate margin and gross domestic product are positive with saving deposit. This study reveals that the beta coefficients are positive for inflation, deposit rate, interest rate margin and gross domestic product with call deposit. This study also shows that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with margin deposit. The beta coefficient for deposit rate has negative relationship with margin deposit. This study also reveals that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with total deposit. However, deposit rate has negative impact on total deposit.
The study concludes that higher the inflation, interest rate margin and gross domestic product, higher will be the current deposit, fixed deposit, saving deposit, marginal deposit and total deposit. However, increase in deposit rate will decrease the current deposit, saving deposit, margin deposit and total deposit but it will increase the fixed deposit and call deposit.
The relationship between banks deposit rate and deposit mobilization of Nepalese commercial banks [printed text] / Anrud Kumar Yadav, Author . - 2016 . - 98p. ; GRP/Thesis + 7/B.
Languages : English
Abstract: The success of the banking sector greatly lies on the deposit mobilization. Mobilization of deposits is one of the important functions of banking business. It is an important source of fund for the banks. The commercial banks must tap deposits from urban and rural areas which helps the banks to provide large amount of funds to priority sectors for development (Shettar, 2014). The mobilization of deposits domestically is crucial in many developing countries. Domestic funds provide a cheap and reliable source of funds for development, which is of great value in developing countries, especially when the economy has difficulty in raising capital in international markets (Adams, 1978). The cost of savings mobilization depends not only on internal factors such as operational efficiency, but also on external factors such as minimum reserve requirements, tax rates and general market conditions (Ledgerwood, 1999). Bajracharya (1990) concludes that the mobilization of domestic saving is one of the important aspects of monetary policies in Nepal. For this purposes commercial banks stood as the vital and active financial intermediary for generating resources in the form of deposit of private sector which further can be used for providing credit to the investor in different aspects of economy.
The major objective of this study is to examine relationship between the interest rate on deposit and deposit mobilization by the commercial banks. The specific objectives are: a) To identify the structure and pattern of current deposit, fixed deposit, saving deposit, call deposit and other deposit in commercial banks of Nepal, b) To analyze the relationship between interest rate and deposit mobilization. c) To examine collective impact of inflation, deposit rate, interest rate margin and GDP on deposit mobilization in Nepalese commercial banks. d) To determine the major factors affecting the deposit mobilization of Nepalese commercial banks.
This study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted to undertake fact-finding operation searching for adequate information about the relationship between bank's deposit interest rate and deposit mobilization of Nepalese commercial banks. This study is based on the secondary data which are gathered from 20 commercial banks in Nepal. The total numbers of observations is 158. The main sources of data are supervision reports of Nepal Rastra Bank, Economic Survey and various annual reports of different commercial banks. The data are collected for current deposit, fixed deposit, saving deposit, call deposit, margin deposit, total deposit, inflation, deposit rate, interest rate margin, and gross domestic product. These data are collected for the period 2007- 2014.
The study reveals that inflation, interest rate margin and gross domestic product have positive relationship with all types of deposits (current deposit, fixed deposit, saving deposit, call deposit, margin deposit and total deposit). Deposit rate is negatively related to current deposit, saving deposit, margin deposit and total deposit, whereas deposit rate is positively related with fixed deposit and call deposit. The regression result revealed that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with current deposit. It indicates that inflation, interest rate margin and GDP have positive impact on current deposit. The beta coefficient is negative for the deposit rate with current deposit. Similarly, the beta coefficient for inflation, deposit rate, interest rate margin and gross domestic product are positive with fixed deposit. Likewise, the beta coefficient for inflation, interest rate margin and gross domestic product are positive with saving deposit. This study reveals that the beta coefficients are positive for inflation, deposit rate, interest rate margin and gross domestic product with call deposit. This study also shows that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with margin deposit. The beta coefficient for deposit rate has negative relationship with margin deposit. This study also reveals that the beta coefficients are positive for inflation, interest rate margin and gross domestic product with total deposit. However, deposit rate has negative impact on total deposit.
The study concludes that higher the inflation, interest rate margin and gross domestic product, higher will be the current deposit, fixed deposit, saving deposit, marginal deposit and total deposit. However, increase in deposit rate will decrease the current deposit, saving deposit, margin deposit and total deposit but it will increase the fixed deposit and call deposit.
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Barcode Call number Media type Location Section Status 229/D YAD Thesis/Dissertation Uniglobe Library Social Sciences Available The relationship between financial risk management and financial performance of Nepalese commercial banks / Shilpa Upreti
Title : The relationship between financial risk management and financial performance of Nepalese commercial banks Material Type: printed text Authors: Shilpa Upreti, Author Publication Date: 2017 Pagination: 99p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Risk management Class number: 368 Abstract: Commercial banks play an important role for economic development and foster economic growth by providing number of financial services. One of the important functions of the commercial banks is the financial intermediation functions and thus it transfers the fund from surplus units to the deficit units. It accepts deposits and provides loan and advances to the needed people, institutions and investors. It also invests in several short term and long term projects. Thus, it is constantly facing different types of risk. The risky lending increases the profitability in one hand while on the other hand, it can lead to the bank failure too if cannot be managed properly. In such circumstances, credit character, credit monitoring, repayment capacity of borrower, liquidity, operating expense, interest rate spread, debt to equity ratio, capital adequacy ratio and the concept of prudent lending plays a great role for analyzing the impact of risk management on the financial performance in the context of commercial banks of Nepal. The survival and success of a financial organization depends critically on the efficiency of managing these risks (Khan & Ahmed, 2001).
Francis (2007) revealed that capital adequacy and credit risk have positive effect on bank profitability. However, liquidity ratio were negatively and significantly related to bank profitability.Gaur& Gupta (2011) supported the positive relationship arguing that experience through age helps the business to perform better. Ngetich&Wanjau (2011) argued banks which perform well manage to keep interest spread wide.Rachdi (2013) revealed that inflation rates had a negatively significant influence on financial performance of banks.
The major objective of the study is to assess the relationship between financial risk management and financial performance of the Nepalese commercial banks. The study is based on secondary data of 15 commercial banks with 135 observations for the period of 2007/08 to 2015/16. The main sources of data include various issues of Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The panel 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 relationship between risk management and financial performance of Nepalese commercial banks.
The study found that capital adequacy ratio, interest rate spread, bank age and inflation rate have positive relationship with return on assets and net interest margin. It indicates that higher the capital adequacy ratio, interest rate spread, bank age and inflation, higher would be the return on assets and net interest margin. Similarly, non performing loan, liquidity ratio and debt to equity ratio are negatively related to return on assets and return on net interest margin. It indicates that lower the non performing loan, higher would be the return on assets and net interest margin. It also indicates that higher the debt to equity, lower would be the return on assets and net interest margin. Likewise, older the bank, greater would be the return on assets and net interest margin.
The regression results of return on assets show that capital adequacy ratio, interest rate spread have positive and significant impact on return on assets. However, results show thatnon performing loan, liquidity ratio and debt to equity ratio have negative impact on return on assets. Likewise, results show that beta coefficient is positive for inflation. However, coefficient is not significant. Likewise, regression resultof net interest margin show that beta coefficients are positive for interest rate spread, interest rate spread, bank age and capital adequacy ratio, where beta coefficients are significant. Non-performing loan, Liquidity ratio and debt to equity ratio have negative impact on net interest margin. Thus, interest rate spread, capital adequacy ratio and non-performing loan are the major factors affecting the profitability of Nepalese commercial banks.
The relationship between financial risk management and financial performance of Nepalese commercial banks [printed text] / Shilpa Upreti, Author . - 2017 . - 99p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Risk management Class number: 368 Abstract: Commercial banks play an important role for economic development and foster economic growth by providing number of financial services. One of the important functions of the commercial banks is the financial intermediation functions and thus it transfers the fund from surplus units to the deficit units. It accepts deposits and provides loan and advances to the needed people, institutions and investors. It also invests in several short term and long term projects. Thus, it is constantly facing different types of risk. The risky lending increases the profitability in one hand while on the other hand, it can lead to the bank failure too if cannot be managed properly. In such circumstances, credit character, credit monitoring, repayment capacity of borrower, liquidity, operating expense, interest rate spread, debt to equity ratio, capital adequacy ratio and the concept of prudent lending plays a great role for analyzing the impact of risk management on the financial performance in the context of commercial banks of Nepal. The survival and success of a financial organization depends critically on the efficiency of managing these risks (Khan & Ahmed, 2001).
Francis (2007) revealed that capital adequacy and credit risk have positive effect on bank profitability. However, liquidity ratio were negatively and significantly related to bank profitability.Gaur& Gupta (2011) supported the positive relationship arguing that experience through age helps the business to perform better. Ngetich&Wanjau (2011) argued banks which perform well manage to keep interest spread wide.Rachdi (2013) revealed that inflation rates had a negatively significant influence on financial performance of banks.
The major objective of the study is to assess the relationship between financial risk management and financial performance of the Nepalese commercial banks. The study is based on secondary data of 15 commercial banks with 135 observations for the period of 2007/08 to 2015/16. The main sources of data include various issues of Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The panel 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 relationship between risk management and financial performance of Nepalese commercial banks.
The study found that capital adequacy ratio, interest rate spread, bank age and inflation rate have positive relationship with return on assets and net interest margin. It indicates that higher the capital adequacy ratio, interest rate spread, bank age and inflation, higher would be the return on assets and net interest margin. Similarly, non performing loan, liquidity ratio and debt to equity ratio are negatively related to return on assets and return on net interest margin. It indicates that lower the non performing loan, higher would be the return on assets and net interest margin. It also indicates that higher the debt to equity, lower would be the return on assets and net interest margin. Likewise, older the bank, greater would be the return on assets and net interest margin.
The regression results of return on assets show that capital adequacy ratio, interest rate spread have positive and significant impact on return on assets. However, results show thatnon performing loan, liquidity ratio and debt to equity ratio have negative impact on return on assets. Likewise, results show that beta coefficient is positive for inflation. However, coefficient is not significant. Likewise, regression resultof net interest margin show that beta coefficients are positive for interest rate spread, interest rate spread, bank age and capital adequacy ratio, where beta coefficients are significant. Non-performing loan, Liquidity ratio and debt to equity ratio have negative impact on net interest margin. Thus, interest rate spread, capital adequacy ratio and non-performing loan are the major factors affecting the profitability of Nepalese commercial banks.
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Barcode Call number Media type Location Section Status 402/D 368 UPR Thesis/Dissertation Uniglobe Library Social Sciences Available The relationship between firm's financial performance and stock return of Nepalese commercial banks / Sunita Shrestha
Title : The relationship between firm's financial performance and stock return of Nepalese commercial banks Material Type: printed text Authors: Sunita Shrestha, Author Publication Date: 2017 Pagination: 113p. Size: GRP/Thesis Accompanying material: 9/B Languages : English Class number: 338.604 Abstract: The investment on stock has become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the stock return. The financial performance of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investors,which plays a significant role to gain reliable and consistent return by selecting winning portfolio.
This study attempts to examine the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 144 observations for the period of 2007/08 to 2014/15. Data and informationhave been collected form Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between firm’s financial performance and stock return of Nepalese commercial banks.
The result shows that average market price per share is highest for SCBNL (Rs. 3285) and lowest for SUBL (Rs. 215.50). The average stock return is highest for NBBL (27.01 percent) and lowest for SCBNL (-5.70 percent). The average excess return is highest for NBBL (23.56 percent) and lowest for SCBNL (-9.14 percent). The average return on assets is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NIBL (4.46 percent) and lowest for NCCBL (0.93 percent). The average earning yield is highest for NBBL (16 percent) and lowest for MBL (2.02 percent). The average price earnings ratio is highest for MBL (79.29 times) and lowest for NBBL (8.11 times). The average book to market ratio is highest for NCCBL (0.49 times) and lowest for SCBNL (0.10 times). The average assets debt to equity ratio is highest for NSBIBL (14.18 times) and lowest for NBBL (1.36 times). The average profit after tax is highest for NABIL (Rs. 1591.01 million) and lowest for MBL (Rs. 204.26 million).
The descriptive statistics for selected commercial bank shows that the average market price per share, stock return, excess return, dividend yield, earning yield, price earnings ratio book to market ratio, debt to equity ratio and profit after taxare Rs. 915.87, 7.90 percent, 4.45 percent, 1.89 percent, 2.58 percent, 5.14 percent, 28.06 times, 0.30 times, 9.91 times and Rs. 653.12 millionrespectively.
The correlation matrix shows that return on assets, dividend yield, earning yield, price earnings ratio, debt to equity ratio and profit after tax are positively related to market price per share,while book to market ratio is negatively related to market price per share. The result states that return on assets has positive relationship with stock return and excess return. However, dividend yield and earning yield have negative relationship with stock return and excess return. On the other hand, price earnings ratio is positively related to stock return and excess return, whereas book to market ratio is negatively related to stock return and excess return. Furthermore, the debt to equity ratio and profit after tax are positively correlated to stock return and excess return.
The regression analysis reveals that return on assets and price earnings ratiohave positive impact on market price per share. This indicates that higher return on assets and price earnings ratio, higher would be the market price per share. However, book to market ratio has negative impact on market price per share. This reveals that higher the book to market ratio, lower would be the market price per share. On the other hand, profit after tax has positive impact on market price per share. This states that higher the profit after tax, higher would be the market price per share.
The study also shows that price earnings ratio has positive impact on stock return and excess return. This reveals that higher the price earnings ratio, higher would be the stock return and excess return. However, book to market ratio has negative impact on stock return and excess return. This states that higher the book to market ratio, lower would be the stock return and excess return. On the other hand, the profit after tax has positive impact on stock return and excess return. This denotes that higher the profit after tax, higher would be the stock return and excess return. The study also reveals that price earnings ratio, book to market ratio and profit after tax are major determinants of stock return in Nepalese commercial banks.
The relationship between firm's financial performance and stock return of Nepalese commercial banks [printed text] / Sunita Shrestha, Author . - 2017 . - 113p. ; GRP/Thesis + 9/B.
Languages : English
Class number: 338.604 Abstract: The investment on stock has become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the stock return. The financial performance of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investors,which plays a significant role to gain reliable and consistent return by selecting winning portfolio.
This study attempts to examine the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 144 observations for the period of 2007/08 to 2014/15. Data and informationhave been collected form Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between firm’s financial performance and stock return of Nepalese commercial banks.
The result shows that average market price per share is highest for SCBNL (Rs. 3285) and lowest for SUBL (Rs. 215.50). The average stock return is highest for NBBL (27.01 percent) and lowest for SCBNL (-5.70 percent). The average excess return is highest for NBBL (23.56 percent) and lowest for SCBNL (-9.14 percent). The average return on assets is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NIBL (4.46 percent) and lowest for NCCBL (0.93 percent). The average earning yield is highest for NBBL (16 percent) and lowest for MBL (2.02 percent). The average price earnings ratio is highest for MBL (79.29 times) and lowest for NBBL (8.11 times). The average book to market ratio is highest for NCCBL (0.49 times) and lowest for SCBNL (0.10 times). The average assets debt to equity ratio is highest for NSBIBL (14.18 times) and lowest for NBBL (1.36 times). The average profit after tax is highest for NABIL (Rs. 1591.01 million) and lowest for MBL (Rs. 204.26 million).
The descriptive statistics for selected commercial bank shows that the average market price per share, stock return, excess return, dividend yield, earning yield, price earnings ratio book to market ratio, debt to equity ratio and profit after taxare Rs. 915.87, 7.90 percent, 4.45 percent, 1.89 percent, 2.58 percent, 5.14 percent, 28.06 times, 0.30 times, 9.91 times and Rs. 653.12 millionrespectively.
The correlation matrix shows that return on assets, dividend yield, earning yield, price earnings ratio, debt to equity ratio and profit after tax are positively related to market price per share,while book to market ratio is negatively related to market price per share. The result states that return on assets has positive relationship with stock return and excess return. However, dividend yield and earning yield have negative relationship with stock return and excess return. On the other hand, price earnings ratio is positively related to stock return and excess return, whereas book to market ratio is negatively related to stock return and excess return. Furthermore, the debt to equity ratio and profit after tax are positively correlated to stock return and excess return.
The regression analysis reveals that return on assets and price earnings ratiohave positive impact on market price per share. This indicates that higher return on assets and price earnings ratio, higher would be the market price per share. However, book to market ratio has negative impact on market price per share. This reveals that higher the book to market ratio, lower would be the market price per share. On the other hand, profit after tax has positive impact on market price per share. This states that higher the profit after tax, higher would be the market price per share.
The study also shows that price earnings ratio has positive impact on stock return and excess return. This reveals that higher the price earnings ratio, higher would be the stock return and excess return. However, book to market ratio has negative impact on stock return and excess return. This states that higher the book to market ratio, lower would be the stock return and excess return. On the other hand, the profit after tax has positive impact on stock return and excess return. This denotes that higher the profit after tax, higher would be the stock return and excess return. The study also reveals that price earnings ratio, book to market ratio and profit after tax are major determinants of stock return in Nepalese commercial banks.
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Barcode Call number Media type Location Section Status 287/D 338.604 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available