Non-Performing Assets and its Effect on Commercial Bank’s Profitability: A Comparative Study on NBL, NABIL And NIBL

Abstract

This study has investigated the Non-performing assets and its effect on commercial bank’s profitability. A Comparative study on NBL, NABIL and NIBL. The main objective was to examine the non-performing assets trend and its Impact on banks profitability. Analytical and descriptive research design was used to accomplish research design. The study is based on secondary data and data was collected from website, annual report, economy survey and NRB reports. Correlation analysis respectively were to examine the nature and extent of the relationship between the variables. The study covered three commercial banks over a period of past 7 fiscal years from 2010/11 to 2016/17. Correlation analysis and descriptive statistics were used in the analysis and finding suggest that there is an insignificant relationship between NPA and profitability. Hence, the result show that NBL has high NPA and high amount of LLP which decrease bank’s profit.