A strong credit risk management avoids significant drawback and increase financial performance of banks. Good financial performance rewards employee as well as shareholders for their working environment and investment. The credit risk management is an important predictor for the profitability of the bank. Therefore, the credit risk management greatly impact on profitability of the bank. Data were collection from the sample of 15 commercial banks operated in Nepali economy for the period of 2011 to 2020 have been collected and analyzed using mean, standard deviation, correlation and regression analysis. Pooled regression analysis model (OLS) of panel data analysis is used as a major tool of analysis. In the model specification return on equity (ROE) was used as bank profitability indicators while capital adequacy ratio, cash reserve ratio, loan loss provision ratio, non-performing loan ratio and bank size were used as indicators of credit risk management. The finding indicates that credit risk has the significant impact on profitability of commercial banks in Nepal. The study reveals that cash reserve ratio, loan loss provision ratio and non-performing loan ratio has insignificant negative impact on return on equity in Nepali commercial bank. The study reveals that bank size and liquidity ratio has positive impact on return on equity. The study also reveals that liquidity ratio has significant positive impact on return on equity in Nepali commercial bank. Capital adequacy ratio also reveals has significant negative impact on return on equity. Thus, this study concludes that the credit risk management is an important predictor for the profitability of the bank. Therefore, the success of the bank in term of profitability depends on its credit risk management.