CREDIT RISK MANAGEMENT AND PROFITABILITY OF NEPALESE COMMERCIAL BANKS

Abstract

Commercial bank has been playing a great role for the economic development of country directly or indirectly. Therefore, the study has examined the credit risk management and profitability of Nepalese commercial banks. The study is based on secondary data and data collected from annual reports of selected commercial banks and bank supervision report of Nepal Rastra Bank. The study has employed descriptive and casual comparative research design. For the study purpose nine commercial banks selected from the period of 2013/14 to 2021/22. For the study purpose ROA and ROE are considered as dependent variables and NPL, CDR, CRR, CAR and BR considered as independent variables. The results revealed that CDR and CAR have positive and significant impact on ROA of commercial banks in Nepal. However, NPLR, CRR and BR negative and insignificant impact on ROA. Similarly, CDR and CAR positive and significant impact on ROE whereas NPLR, CRR and BR have negative and insignificant impact on ROE of Nepalese commercial banks.