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    COMPARATIVE FINANCIAL PERFORMANCE ANALYSIS OF COMMERCIAL BANKS OF NEPAL USING CAMEL MODEL (With Reference to Government Owned Banks)
    (Shanker Dev Campus, 2024) Ambika Dangol; Asso. Prof. Dr. Kapil Khanal
    The study examined the financial performance of Nepalese commercial banks using the CAMEL model, with emphasis on government owned banks, over a ten-year period from 2068/69 to 2077/78. The Descriptive cum casual research design has been adopted to meet the study's objectives. The study relied on secondary data obtained from the annual financial reports of the selected government owned commercial banks' official websites. The data have been analyzed using different financial ratios and statistical tools. Capital adequacy ratio (CAR), NPA to Total Advances ratio, Total Advances to Total Deposits ratio, Net Interest Income to Total Assets ratio and Liquid Assets to Total Assets ratio have been taken as CAMEL indicators. Diverse financial and statistical methods were utilized to determine the bank's overall financial performance, while correlation coefficients and multiple regression models were applied to measure the impact of CAMEL variables on financial performance, i.e. ROA and ROE of banks. As financial ratio analysis helps to differentiate the financial performance of commercial banks, the same bank was ranked differently based on the different financial ratios. According to the CAMEL composite rating, the study's findings revealed that NBL and ADBL ranked first with an equal composite average, followed by RBBL. However, as ADBL has first rank in three CAMEL parameter, i.e., Capital Adequacy, Management Efficiency and Earning, we concluded that ADBL has better financial performance than NBL and RBBL. The correlation analysis revealed that NBL needs to focus on maintaining Capital Adequacy, Management Efficiency and Earning of the bank as they help improve profitability. Similarly, RBBL needs to focus on Capital Adequacy, Assets Quality and Earning as an increase in these variables is also helpful in increasing the profitability of the bank. And correlation analysis of ADBL revealed that it should give priority to maintaining and improving Assets Quality, Management efficiency, and Earning of the bank, as increments on these variables also help to increase profitability of the bank. From the multiple regression analysis, it was found that ROA and ROE of each sample bank have a statistically insignificant relationship with CAMEL. Only NBLs’ earnings have a significant positive impact on the bank's Return on Assets.