CREDIT RISK MANAGEMENT ON FINANCIAL PERFORMANCE OF DEVELOPMENT BANK IN NEPAL

Abstract

This study Credit risk management on financial performance of development bank in Nepal. The purses of the study examine the relationship between credit risk management and financial performance of selected development banks Nepal .The dependent variables are return on assets and return on equity while independent variables include Capital Adequacy ratio, Asset Quality Ratio, Management efficiency ratio, Earnings ratio and Liquidity ratio. The study covers 3 Development Bank out of the 17 Development Bank license on the Nepal Rastra Bank. The study used secondary data. Data and information have been collected from NRB of Nepal and annual report of selected Development. To drive the result of the study; financials tools, correlation analysis, multiple regression analysis were applied. Credit Risk Management on Financial Performance was measure by ROA and ROE while Capital Adequacy ratio, Asset Quality Ratio, Management efficiency ratio, Earnings ratio and Liquidity ratio. The analysis has done using statistical package for social science SPSS software version 25. Keywords: Capital Adequacy ratio, Asset Quality Ratio, Management efficiency ratio, Earnings ratio and Liquidity ratio, ROA, ROE