Commercial Banks In Nepal Research Articles

Perceptions of Organizational Commitment in Nepalese Insurance Companies and Commercial Banks

This study aims to examine the status of organizational commitment (affective commitment, continuancecommitment, and normative commitment) in insurance companies and commercial banks of Nepal. Thisstudy is conducted utilizing a survey methodology with questionnaires serving as the primary tool. Sixinsurance companies and six commercial banks are covered by this study. A total of 360 questionnaires—30in each of the 12 organizations—have been distributed, and 225 (62.5%) of those that have been fullycompleted and returned are used for the study. The data are analyzed by using the latest version of thestatistical package for social science (SPSS). Descriptive statistical tools like mean and standard deviationare used. The one-way analysis of the variance is used for determining the statistical differences between theorganizational commitment dimensions found in two samples (insurance companies and commercialbanks). Based on the results, affective commitment is found at a high level, normative commitment at amoderate level, and continuance at a low level in Nepalese insurance companies and commercial banks.Insurance companies show higher affective and normative commitment than commercial banks. Significantdifferences in judgments of affective and normative commitment between employees of Nepalese insurancecompanies and commercial banks are also revealed by analysis of variance. In fact, firms that have a strongorganizational commitment are better able to keep employees, which put them in a better position to gain theadvantages of a more devoted, engaged, and dependable workforces. Therefore, today's businesses mustdesign workplaces that encourage more moral and emotional commitment among their employees.

The impact of liquidity on common stocks returns: Empirical insights from commercial banks in Nepal

Most developed and emerging economies pay substantial attention to liquidity to understand stock return behavior. However, there is a need for more focus on understanding the impact of such factors on stock returns in developing countries such as Nepal. This study aims to examine the effect of liquidity, size, financial and asset risk, growth potential, and profitability on stock returns in Nepalese commercial banks. A pooled ordinary least squares regression model is utilized, employing data from the Central Bank of Nepal and the Nepal Stock Exchange. There are 249 observations in the data set, which covers the period from 2009/10 to 2019/20. The model considers the impact of trading volume, market capitalization, book-to-market ratio, asset growth, and return on asset on stock returns in Nepalese commercial banks. The results indicate that trading volume, a proxy of liquidity, positively affects stock returns in Nepalese commercial banks. The finding reveals that when other variables are held constant, a 0.288 percent increase in stock returns is expected for a one percent rise in trading volume. However, asset growth and return on assets show a weakly favorable link with stock returns in Nepal. Conversely, the research findings suggest an insignificant inverse correlation between book-to-market and stock returns. A decrease in stock returns of 0.307 percent is expected for a one percent increase in the book-to-market ratio. Similarly, market capitalization has a negligible effect on stock returns in Nepal.

Impact of Credit Risk and Macroeconomic Variables on the Profitability of Commercial Banks in Nepal

This study was conducted to examine the impact of credit risk and macroeconomic variables on the profitability of commercial banks in Nepal. Return on assets and earnings per share of the banks were taken as regrassands. Whereas, as regressors, non-performing loan, capital adequacy ratio and credit to deposit ratio were taken as the proxies of credit risk, and GDP growth rate, consumer price index and base rate were studied as indicators of macroeconomic variables. Following simple random sampling techniques, 14 commercial banks were selected as sample for the study. The required quantitative data were retrived from annual financial reports of the banks. Data were analyzed on Gretl software. The Pearson correlation and Ordinary Lease Square model for regression resulted that the GDP growth rate was insignificant in defining the variation on return on assets. Likely, inflation and base rate were not significant in defining the variation on earning per share. Result of this study provided sufficient scope to bankers in developing their growth strategies.

Impact of Corporate Social Responsibility on Corporate Reputation of Public Sector Commercial Banks in Nepal

This study delves into the integral role of Corporate Social Responsibility (CSR) in shaping corporate reputation, focusing on public sector commercial banks (PSCBs) in Nepal. A sample of 105 banking professionals from Nepal Bank Limited (NBL), Rastriya Banijya Bank (RBB), and Agriculture Development Bank Limited (ADBL) participated, offering insights into CSR practices by employing a well-structured 5-point Likert scale questionnaire. The research elucidated that CSR activities undertaken by PSCBs were positively perceived by respondents, who concurrently acknowledged the commendable corporate reputations of their organizations. Notably, community responsibilities (β = 0.492, p-value < 0.001, 95% CI: 0.278 - 0.707) and investor responsibilities (β = 0.221, p-value = 0.01, 95% CI: 0.054 - 0.388) emerged as significant contributors to enhancing corporate reputation among the six CSR practices examined. To measure the impact, simple and multiple regression analyses were employed, affirming the positive association between CSR initiatives and corporate reputation. This research underscores the pivotal role of CSR, particularly in community and investor engagements, as a catalyst for bolstering the corporate reputation of PSCBs in Nepal. These findings offer valuable insights for organizational strategy and underscore the reciprocal benefits of responsible business practices. Keywords: Corporate reputation, Corporate social responsibility, Practices of CSR, Public sector, Commercial banks.

Impact of Capital Adequacy on Profitability of Commercial Banks in Nepal

Purpose: This study aims to assess the impact of capital adequacy on the profitability of selected commercial banks in Nepal. It specifically measures and evaluates the capital adequacy ratios and profitability ratios of the selected Nepalese commercial banks. Methods: The research employs descriptive and casualcomparative research designs, using a sample of one governmentowned bank and one private sector bank in Nepal. The study analyzes CCR, SCR, and CAR to measure capital adequacy and ROE, ROA, and NPM to measure profitability. Findings: The study finds that the capital position of the commercial banks is adequate according to the capital adequacy framework 2015 and unified directives number one of NRB. However, profitability ratios of the sample Nepalese commercial banks are high but decreasing over the past 10 years. The correlation between ROE and capital adequacy variables is very weakly positive, while the correlation between NPM and capital adequacy variables is weakly positive. However, the correlation between ROA and capital adequacy variables is weakly negative. The regression analysis finds insignificant results, indicating that capital adequacy has not made any significant impact on profitability. Value: The study provides insights into the impact of capital adequacy on the profitability of commercial banks in Nepal, contributing to the understanding of the banking sector in Nepal. It also highlights the decreasing trend in profitability ratios and the insignificant impact of capital adequacy on profitability. Keywords: Capital adequacy, Profitability, Commercial banks, Nepal, CCR, SCR, CAR, ROE, ROA, NPM

The role of corporate governance structures in mediating the relationship between external supervision, credit appraisal measurement, capital adequacy, and performance of commercial banks in Nepal.

This study investigates the role of corporate governance structures as mediators between external supervision, credit appraisal measurement, capital adequacy, and the performance of commercial banks in Nepal. This research sheds light on the significance of effective corporate governance practices within Nepali commercial banks and how certain governance mechanisms may impact bank performance. A quantitative research design was employed, using data from commercial banks in Nepal for this study. Surveys were utilized to collect quantitative data. Structural equation modeling was used as a primary tool to assess the data. The findings add to existing literature about corporate governance and its effects on bank performance in emerging economies such as Nepal. The study's findings offer valuable insights into the significance of corporate governance structures, external supervision, credit appraisal measurement systems, and capital adequacy for commercial banks' performance in Nepal. The research methodology adds value to the existing literature using quantitative data collection methods. Its results may have practical ramifications for banks, regulators, and policymakers, suggesting effective governance practices as essential measures for increasing stability and performance at commercial banks.

WORK-LIFE BALANCE OF FEMALE HUMAN RESOURCES IN SELECTED BANKS IN NEPAL

Work-life imbalance is a major phenomenon for female human resources in Nepal. The objectives of the study are to identify the crucial factors affecting the work-life balance (WLB) of female human resources in selected commercial banks in Nepal and determine the influence of crucial factors affecting work-life balance on the work-life balance of female human resources in selected commercial banks in Nepal. Descriptive and causal-comparative research design and quantitative data were adopted in this study. This study applied primary data. Agricultural Development Bank Limited, Prabhu Bank, and Himalayan Bank Limited were selected as sample organizations for the study. Sample size of the study was 215. Judgmental sampling techniques were applied to collect data from respondents. Inferential statistics were applied to analyze data. Regression analysis reveals that family support, workplace support, time management, and financial assistance have significant effects on WLB. It can be concluded that these components can increase WLB. Just opposite to them child care and workload have insignificant effects on WLB. So, they cannot increase WLB in commercial banks in Nepal. Banks have to make pregnancy policies for female professionals of the commercial banks. Also, banks should make compressed work weeks, flextime, and part-time facilities to satisfy the family's needs. Policies of health insurance paid leave, and better holiday policies can enhance the work-life balance of the human resources and can reduce their workload.

Comparative Analysis of Credit Risk Management Practices: A Study of Domestic and Joint Venture Commercial Banks in Nepal

The capital adequacy ratio, credit to deposit ratio, bank size, leverage ratio, loan loss provision, and non-performing loans were assessed for determining the relationships within domestic and joint venture commercial banks in Nepal. Using secondary data from 10 commercial banks spanning 2006/09 to 2019/20, totaling 140 observations, the study employs descriptive and regression analyses. Data sources include NRB's Banking and Financial Statistics, annual supervision reports, and selected banks' annual reports. HBL has the highest average non-performing loan (2.56%), while NIC Asia has the lowest (0.23%). SCBL exhibits the highest average capital adequacy ratio (15.92%), and SBL leads in credit to deposit ratio (86.85%). EBL tops in bank size (Rs 85,327 million), and MBL in leverage ratio (19.39%). HBL records the highest loan loss provision ratio (1.49%), with NBL at the lowest (0.32%). Descriptive statistics reveal the mean non-performing loan for domestic banks (1.12%), joint venture banks (1.22%), and overall banks (1.17%). The correlation analysis indicates negative correlations between capital adequacy ratio, bank size, credit to deposit ratio, leverage ratio, and loan loss provision with non-performing loans. Regression results underscore the significance of leverage ratio and loan loss provision in impacting non-performing loans for overall banks, while domestic banks find significance only in loan loss provision. Joint venture banks show significance in leverage ratio and loan loss provision. Keywords: Credit risk, Commercial banks, Nepalese banking sector, Leverage ratio, Loan loss provision, Capital adequacy ratio, Descriptive analysis, Regression analysis.

The Anomalies of Stock Market Prices: An Empirical Study of Commercial Banks in Nepal

The Anomalies of Stock Market Prices: An Empirical Study of Commercial Banks in Nepal

Firm Specific and Macroeconomic Determinants of Common Stock Prices: Evidence from Commercial Banks of Nepal

Firm Specific and Macroeconomic Determinants of Common Stock Prices: Evidence from Commercial Banks of Nepal

An Empirical Assessment of Factors Impacting Stock Prices of Nepalese Commercial Banks

This study examines the impact of various financial variables on the pricing of commercial banks in Nepal. Key financial metrics analyzed include earnings per share, dividend yield, price-toearnings (P/E) ratio, earnings yield, book value per share, money supply, market-to-book value ratio, and stock return. The research highlights the importance of market financial ratios in the investment decisions of Nepalese investors. Using data from 10 out of 20 commercial banks listed on the Nepal Stock Exchange, spanning 110 yearly observations from fiscal years 2012/13 to 2022/23, multiple regression models were employed to determine the relationships between these factors. The findings reveal that earnings per share, dividend yield, P/E ratio, book value per share, money supply, market-to-book value ratio, and stock return are significantly positively correlated with the prices of commercial banks. Conversely, earnings yield shows a negative correlation. Despite the strong preference for price and profitability metrics, the study's limited sample size and focus on commercial banks may affect the generalizability of the results. This research provides critical insights, particularly emphasizing the importance of earnings per share, dividend yield, P/E ratio, and book value per share in guiding investors' financial decisions in Nepal. The findings are anticipated to benefit investors, scholars, policymakers, and other stakeholders by enhancing their understanding of the factors influencing stock prices in the Nepalese banking sector.

The Role of Task, Relationship, and Process Conflicts in Shaping Employee Performance in Nepal’s Commercial Bankst

This study aims to assess the impact of workplace disputes—specifically those related to tasks, relationships, and procedures—on the performance of workers at commercial banks in Nepal. The banking sector, characterized by hierarchical structures and intense environments, is particularly susceptible to various forms of conflict. A standardized questionnaire was administered to 200 respondents across different departments of commercial banks, employing a quantitative approach. Correlation and regression analyses were conducted using SPSS to investigate the relationship between workplace disagreements and employee performance. Results indicate that all three types of workplace conflicts—task, interpersonal, and process conflicts—significantly adversely affect employee performance. A moderately negative correlation was found between task conflict and performance (r = -0.45), suggesting that unresolved disagreements can hinder productivity despite potentially fostering discussion. Interpersonal conflict showed a considerable negative impact on performance (B = -0.65), indicating that strained relationships undermine team cohesion and morale. Process conflict significantly affected workflow efficiency (F = 6.82, p = 0.005). The study also revealed that employee experience moderates the relationship between task conflict and performance, with more experienced employees managing conflicts more effectively. These findings underscore the need for tailored conflict resolution strategies to mitigate the negative effects of workplace disputes. Keywords: workplace conflict, employee performance, task conflict, relationship conflict, conflict management

Exploring the Impact of Loan Loss Provision on Profitability: An Analysis of Commercial Banks in Nepal

Background: The central bank closely examines the loan loss provision maintained by Nepalese commercial banks in order to minimize potential losses resulting from a rise in non-performing loans, which reduces bank capital and squeezes the profitability and sustainability of banks. Establishing the relationship between loan loss provision and profitability is crucial in assessing the financial performance and risk management effectiveness of commercial banks. This analysis enables banks to minimize loan loss provisions, reinforcing profitability and ensuring long-term sustainability through the implementation of appropriate credit policies. Objectives: This research aims to analyses the influence of loan loss provision on the profitability of commercial banks in Nepal. The study also takes into account pertinent variables: non-performing assets, loans and advances to total deposits, and capital adequacy which may affect the relationship. Methods: This study has used both the descriptive and causal-comparative study approaches. The study used a panel data set consisting of 105-year observations, spanning from fiscal year 2017/18 to 2021/22, including 21 presently active commercial banks.The return on assets (ROA) is the dependent variable and loan loss provision (LLP) is an independent variable. The Fixed Effect (FE) panel regression has been chosen as an appropriate model as suggested by the Haussmann test. Results: A panel regression model has found a negative and substantial connection between the provisions for loan losses with the Nepalese commercial banks’ profitability. Conclusion: The study concluded that the increased provision for loan losses adversely affects the profitability of commercial banks in Nepal. Therefore, commercial banks should carefully evaluate their loan portfolios, carry out thorough credit risk assessments, and adopt sensible policies to maximize profit and ensure financial stability.

Bank Regulation and Market Risk of Nepalese Commercial Banks

The purpose of this study is to measure the impact of banking regulations specifically broad money supply, weighted average spread rate, base rate, bank capital, and loan loss reserve on market risk of commercial banks in Nepal. This study used descriptive, correlational, and casual comparative research design. This study has used secondary sources of data. Data were used of twenty-six, out of twenty-seven commercial banks from fiscal year 2012/13 to 2018/19. After 2019/20 fiscal year to 2021/22, data were collected from nineteen commercial banks. Rastriya Banijya Bank, Government owned bank not included in this study. The statistical methods employed in this investigation for data analysis included mean, range, coefficient of variation, correlation analysis, and regression analysis. This study presented that highest to lowest scattered data as market risk, loan loss reserve, bank capital, broad money supply, base rate, and weighted average spread rate respectively. There is low degree of inverse relationship between market risk and base rate but there is insignificant relationship of market risk with weighted average spread rate, broad money supply, bank capital, and loan loss reserve. There is positive significant impact of broad money supply and weighted average spread rate on market risk but there is negative impact of base rate on market risk, insignificant impact of bank capital and loan loss reserve on market risk of commercial banks in Nepal.

Capital Adequacy and its Influence on Bank Profitability in Nepal

Background: Capital is a fundamental component for any organization's existence and operation. It serves as the lifeblood for initiating and sustaining businesses, regardless of their scale. The purpose of the research is to evaluate the financial performance of Nepalese commercial banks' capital adequacy ratios. Considering the performance of Nepalese commercial banks, it explicitly investigates the impact of capital adequacy ratio, cost income ratio, debt to equity ratio, equity capital to assets, bank size, and liquid ratio.Methods: This study investigates the impact of capital adequacy on the profitability of commercial banks in Nepal, utilizing secondary data from all commercial banks spanning 2013 to 2022. Analyzing 20 commercial banks, the research reveals that Nepalese commercial banks, on average, generate a respectable profit with typical return variance. The Capital Adequacy Ratio (CAR) consistently surpasses the 10% regulatory threshold, ensuring compliance with Basel III requirements and NRB directives. Results: The Average Assets Ratio (AAR) signifies a proactive approach to lending, contributing to enhanced profitability, while the Government Securities to Total Investment Ratio (G-STIR) indicates risk-averse practices with investments in risk-free assets. The Non-Performing Loans Ratio (NPLR) reflects the challenge of balancing low returns and high risk associated with non-performing loans. Correlation coefficients reveal complex relationships, indicating that increased capital, debt, and non-performing loans may lead to reduced profitability for Nepalese commercial banks. Regression analysis reinforces these findings, highlighting significantly negative correlations between Return on Assets (ROA), Return on Equity (ROE), and spread with capital adequacy determinants, and a positively insignificant relationship between government securities, total investment, and profitability metrics. Conclusions: The study explored capital adequacy determinants (CAR, D-ER, AAR, G-STIR, NPLR) and their impact on bank profitability in Nepal. CAR had no significant effect on ROA, exhibiting a negative correlation. Conversely, D-ER and Advances-to-Assets Ratio positively influenced ROA. G-STIR showed a positive relationship without significance, while NPLR had a significantly negative impact. Non-risk-weighted measures, particularly debt-equity, negatively affected profitability. The study highlighted the limited impact, suggesting a more nuanced capital management approach, emphasizing D-ER and Advances-to-Assets Ratio. Consideration of macroeconomic factors and a balanced capital structure are crucial for commercial banks in Nepal.

AI-Driven Customization in Financial Services: Implications for Social Innovation in Nepal

The study examines the association and influence of Artificial intelligence (AI) adoption and social innovation on decision-making within the Nepalese banking sector. A descriptive and causal-comparative research design is employed in the study. With a purposive sampling design, the study used 230 respondents from commercial banks in Nepal. The study findings show that AI technologies (β = 0.205) and social innovation (β = 0.395) significantly contribute to decision-making (|p < 0.05|). The study scrutinizes specific approaches for fostering social innovation by implementing AI-driven decision-making. Findings revealed meaningful associations between AI, social innovation, and decision-making, emphasizing the interconnected nature of these elements. The study identifies actionable strategies for leveraging AI to promote social innovation. The research implications extend to strategic management, urging financial institutions to integrate AI technologies strategically, aligning technological advancements with societal needs, and fostering a holistic approach to responsible AI adoption. This study contributes valuable insights to the evolving discourse on AI in financial services, providing a nuanced understanding of its implications for decision-making and social innovation within the unique context of Nepalese commercial banks.

Examining Employee Perceptions of External Corporate Social Responsibility Initiatives in the Nepalese Banking Sector: A Descriptive Analysis

The study aimed to explore employee perceptions of external corporate social responsibility (CSR) activities in the Nepalese banking sector. The study used a descriptive research design and collected primary data using questionnaires distributed to employees of commercial banks in Nepal. A real sample was used, and the sample size was 40 participants. The study results show that employees have a positive perception of their company's external CSR efforts, including charitable contributions and environmental initiatives. Importantly, demographic factors like gender, marital status, age, years of service, and education do not significantly influence these perceptions. Thus, the organization’s commitment to external CSR appears consistent across diverse employee demographics. Future researchers can explore the relationship between employees' active involvement in CSR activities, such as volunteering, and their perceptions of the company's CSR commitment.

Capital Structure of Commercial Banks: A Comparative Analysis of NIBL, NABIL, HBL, EBL and SBI

Capital structure is the combination of long term sources of funding i.e. preferred stock, common stock and long – term debt. Those are used to finance the firm. Capital structure analysis is the basis for analyzing the usefulness of accumulation from different sources of capital composition of capital is another factor, which affects the profitability. Loan capital dominant enterprises have less chance for prosperity despite of their huge profits.Capital structure decision is an important financial effect of capital on profitability and value of the firm. The present study will try to analyze and examine the capital structure of the commercial banks in Nepal. This article compares the capital structure of NIBL, NABIL, HBL, EBL and SBI five commercial banks which are currently operated as ‘A’ class banks in Nepal. It evaluates the capital structure and concludes that the total debt ratio of entire five banks is fluctuating. In order to compare the variables financial analysis, leverage analysis and correlation have been used as analytical tools. The conclusion is drawn on the basis of the total proportion of debt and equity capital of the institutions dealing with the problems in terms of capital formation and their overall effects and difficulties in its implementation.

Electronic Banking and Its Impact on Customer Satisfaction of Nepalese Commercial Banks

Electronic Banking and its impact on customer satisfaction of Nepalese commercial banks explores the relationship between internet banking and customer satisfaction. Internet banking allows customers to conduct real-time banking transactions electronically, offering convenience and accessibility. Utilizing a descriptive and casual comparative research design, the study examines internet banking users across 20 commercial banks in Nepal, focusing on Nepal Investment Bank Limited, Nabil Bank Limited, and Himalayan Bank Limited. Through purposive sampling, 150 respondents were selected, with 50 from each bank, for primary data collection. The findings indicate high levels of satisfaction with online banking services, with respondents expressing agreement on various aspects such as ease of website navigation, meeting personal needs, and prompt service delivery. Correlation analysis reveals positive and significant relationships between customer satisfaction and key factors including efficiency, personal need fulfillment, reliability, responsiveness, site organization, and user friendliness. Finding suggest that a strong association between internet banking and customer satisfaction. These findings underscore the importance of internet banking in enhancing customer experience and satisfaction within the Nepalese commercial banking sector. Electronic banking and its impact on customer satisfaction of Nepalese commercial banks.

Factors Influencing Stock Prices in Commercial Banks of Nepal

This study explores the factors that influence stock prices in commercial banking business in Nepal. Descriptive and causal-comparative research design and purposive sampling technique used in this research examine how critical financial variables affect market prices per share (MPPS), including book value per share, earnings per share, dividend per share, and price-earnings ratio. There is a statistically significant but relatively small positive correlation between book value per share. The results show that MPPS and earnings per share, dividend per share, and price-earnings ratio are significantly positively correlated. The model demonstrates its robustness in capturing stock price changes by accounting for around 86.1% of the variation in MPPS. These observations offer insightful recommendations for experts and investors involved in Nepal's commercial banking sector.