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VOL. 6, ISSUE 2 (2024)
Effect of Non-interest income on financial performance of Joint Venture Banks in Nepal
Authors
Arun Ghimire, Pitambar Sapkota
Abstract
The main purpose of this study is to
investigate the Effect of Non-interest Income on financial performance of Joint
venture Banks in Nepal. The dependent variables are Return on Assets and Return
on Equity. The independent variables are Assets Size, Letter of Credit Fee,
Guarantee Income, Remittance Fee, Service Charge, Renewal Fee, Exchange Income,
Profit/loss on Sale of Assets, Dividend Income. Secondary panel data was used
that covered a period of seven years (2016/17 to 2022/23) of the major six
Joint Venture Commercial Banks. The descriptive statistical tools, ratio
analysis and correlation and regression test have been used to make analysis
meaningful and systematic and meet the research objective. The study findings
revealed that there is a negative significant effect of Assets Size on both
Return on Assets and Return on Equity. This shows that there is a positive
significant effect of Renewal Fee on both Return on Assets and Return on
Equity. This shows that there is a positive significant effect of Profit/loss
on Sale of Assets on Return on Assets. This shows that there is a negative
significant effect of Remittance Fee and Exchange Income on Return on Equity.
It is found that the variables like Assets Size and Renewal Fee has effect on
both Return on Assets and Return on equity. Hence, the banks instead of
focusing on all the other variables of non-interest income, they can scrutinize
there area of focus on these variables more than the other as they have a
significant relationship on the profitability. Hence these variables should not
be ignored as they lead to increase in profit with minor risk than the interest
income variables.
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Pages:56-64
How to cite this article:
Arun Ghimire, Pitambar Sapkota "Effect of Non-interest income on financial performance of Joint Venture Banks in Nepal". International Journal of Finance and Commerce, Vol 6, Issue 2, 2024, Pages 56-64
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