FINANCIAL PERFORMANCE OF JOINT VENTURE BANK OF NEPAL USING CAMEL (With Reference HBL, EBL and Nepal SBI)

Abstract

The general objective of this study is to analyze performance evaluation of Nepalese commercial banks using CAMEL model. The specific objectives of the study are; to analyze the financial performance of commercial banks by applying CAMEL model, to examine the relationship of CAMEL model and ROA and ROE of sample banks and to measure the impact of CAMEL model on financial performance of sample banks. To fulfil objective of the study, among the 20 commercial banks, only 3 (Himalayan Bank Ltd., Nepal SBI Bank Ltd and Everest Bank Ltd.) commercial banks have been selected using convenience sampling method. The study is based on secondary sources of data from 2013/14 to 2022/23. The study concluded that profitability has positive significant relationship with CAR and negative significant relationship with NPLR. It also shows that profitability has negative significant relationship with LLPR and negative significant relationship with NPLR. The study concluded that relationship of ROA and ROE with CAR and NPLR are significant at 1% level of significance. The study concluded that profitability has positive significant relationship with CAR and negative significant relationship with LLPR. It also shows that profitability has negative significant relationship with LLPR and negative significant relationship with NPLR. It is concluded that there is highly positive relationship between CAR and profitability (ROE). This indicates as the CAR of sample commercial banks increases; the profitability of the banks also increases. The study concluded that the relationship between CRR and ROE is highly negative. This shows that as the CRR of commercial banks increases, the ROE of the banks decreases and vice-versa. It is concluded that there is negative relationship between LLPR with ROE of sample commercial banks. This concluded that as LLPR increases, the profitability of the banks also decreases and vice-versa. The result found that the relationship between CRR and ROE is highly negative. This shows that as the CRR of commercial banks increases, the ROE of the banks decreases and vice-versa. It is found that there is positive relationship between LLPR with ROE of sample commercial banks. This indicates that as LLPR increases, the profitability of the banks also increases and vice-versa. The result shows that there is negative relationship between NPLR and ROE. This indicates that as NPLR and CRR of sample commercial banks increases, the profitability of the banks decreases and vice-versa. Keywords: Commercial banks, capital adequacy ratio, profitability, non-performing loan, ROA, ROE.