LOAN MANAGEMENT AND ITS IMPACT ON PROFITABILITY OF COMMERCIAL BANKS IN IN NEPAL A

Abstract

This study examines the loan management and bank performance of commercial banks. The study based on secondary data of five commercial banks with 50observations for the periods 2013/14 to 2022/23. The return on assets (ROA) and return on equity (ROE) were selected as dependent variables while Loan to deposit ratio (LDR), non-performing loan ratio (NPLR), debts to equity ratio (DER), credit to deposit ratio (CDR) are the independent variables. The data were collected from annual reports of concern sample bank. The Pearson's correlation coefficients and regression models, variance inflation factors (multicollinearity in regression model results) are too estimated to test significant impact of bank specific factors on the loan management and bank performance of commercial banks. Calculated data has been tabulated and analyzed by using MS-Excel and SPSS. The result shows that Loan to deposit ratio (LDR), non-performing loan ratio (NPLR), debts to equity ratio (DER), credit to deposit ratio (CDR) are positively significant with return on assets (ROA) whereas debts to equity ratio (DER) has significant with return on equity (ROE). The study concludes Loan to deposit ratio (LDR), non-performing loan ratio (NPLR), and credit to deposit ratio (CDR) are insignificant with return on equity (ROE) of Nepalese commercial banks.