CREDIT MANAGEMENT AND PROFITABILITY OF NEPALESE COMMERCIAL BANKS

Abstract

This study is conducted to investigate the impact of credit risk management on the profitability of Nepalese commercial banks. To fulfill the purpose of the study, secondary data were used. Data from three commercial banks for the period of 2013/14 to 2022/23 have been collected and analyzed using financial as well as statistical have been used. Collected data have been properly analyzed with the help of MS-Excel and SPSS v25. In the model specification, return on asset (ROA) were used as bank profitability indicators while capital adequacy ratio (CAR), nonperforming loan ratio (NPLR), Credit to deposit ratio (CDR) and Non-performing loan ratio (NPLR) were used as indicators of credit risk management. Findings of the study reveals that the credit risk management has significantly impact on the profitability of sample banks as suggested by the correlation and regression analysis. The researcher recommends adopting sample size that has been facing real credit risk and should adopt more independent variables for new research projects. Key words: ROA, CAR, NPLR, CDR.