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VOL. 5, ISSUE 1 (2023)
Impact of credit risk management on profitability of Nepalese commercial banks
Authors
Ranjita Kafle
Abstract
The purpose of this study is to examine the impact of Credit risk management on Profitability of Nepalese commercial banks. This study applies the pooled ordinary least square model balanced panel data of ten commercial banks from 2011/12 to 2020/21. Data were obtained by using secondary sources. The study used ROA as profitability measurement tools and capital adequacy ratio, non-performing loan ratio, loan to deposit ratio, cash reserve ratio, and bank size as credit indicators. The result revealed that capital adequacy ratio, loan to deposit ratio, cash reserve ratio, and bank size has been found to have a positive effect on banks' profitability, and non-performing loan ratio negatively affects banks' profitability. Thus, the study concludes that credit risk management is an essential predictor of the profitability of Nepalese commercial banks. Thus, the study concludes that credit risk management predicts banks' profitability significantly. Therefore, the success of the banks in terms of profitability depends on credit risk management.
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Pages:32-39
How to cite this article:
Ranjita Kafle "Impact of credit risk management on profitability of Nepalese commercial banks". International Journal of Finance and Commerce, Vol 5, Issue 1, 2023, Pages 32-39
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