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VOL. 6, ISSUE 1 (2024)
Credit risk, Operational risk and financial performance of commercial banks in Nepal
Authors
Binita Gautam
Abstract
The objective of the
study is to examine the effect of credit risk and operational risk on the
financial performance of the banks. To achieve this study, secondary data was
collected from six commercial banks of Nepal covering the period of 2071/72 to
2078/79. This study used descriptive research design and causal comparative
research design. The Pooled Ordinary Least Square was employed to evaluate the
effect of capital adequacy ratio, non performing loan, loan loss provision,
operating efficiency and bank leverage with banks performance which is measured
by ROA. The study concluded that there is insignificant effect of capital
adequacy ratio and non performing loan with financial performance where as this
study confirmed the significant effect of loan loss provision, operating
efficiency and bank leverage on financial performance. On the basis of findings
it can be concluded that bank should concentrate on loan loss provision, should
enhance the operating efficiency and banks leverage should be properly
maintained in order to increase the financial performance of the commercial
banks.
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Pages:36-42
How to cite this article:
Binita Gautam "Credit risk, Operational risk and financial performance of commercial banks in Nepal". International Journal of Finance and Commerce, Vol 6, Issue 1, 2024, Pages 36-42
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