Determinants of Profitability of Commercial Banks in Nepal

Abstract

The paper has been built of aim of determining profitability of commercial bank in Nepal. Initially, the paper starts with the background of the study. The specific purpose of the study is to analyze the relationship between the bank efficiency and profitability in Nepalese commercial banks has been presented in the second part. The descriptive analytical research design has been adopted to analyze and interpret the population data. The six commercial banks have been review and analyze using SPSS method. The study found that the determinants of commercial banks financial performance in Nepal are Bank efficiency, EPS, ROA, ROE, PE Ratio, investment portfolio and cash Reserve ratio. The study conclude that the major determinants of commercial banks financial performance analysis of Nepal are bank size, liquidity, investment portfolio and cash reserve ratio. This would suggest that banks should ensure efficient and effective supervisory and related service for optimum utilization of resources. Key Words: EPS, ROA, ROE, NPM