Profitability Analysis of Commercial Banks in Nepal

Abstract

Profit maximization is one of most important objectives of commercial banks because survive and face competition in competitive business environment at long term. This study examines the profitability analysis of selected commercial banks in Nepal. In order to investigate the profitability analysis, 5 commercial banks have been taken as sample covering the period of time 2016/ 17 to 2020/ 2021. Data are collected from annual report of the selected commercial banks. In the study, the researcher used various types of tools for data analysis, trend analysis, descriptive analysis, correlations and regression analysis. Profit is dependent variable while, bank capital, deposit; lending, size and CAR are independent variables. The research study show the positive relationship of return on assets with BD and CAR where as negative with BC, BL and BS but. ROE have negative relationship with BC, BL, BS and CAR but positive with BD. It is the evident from the finding that profit of Nepalese commercial bank are strongly affected by the bank capital, deposit, lending, size and capital adequacy ratio. Keywords: ROA, ROE, CAR, Bank Capital, Deposit, Lending, Size.