FINANCIAL PERFORAMNCE ANALYSIS OF DEVELOPMENT BANK
Date
2024
Authors
Journal Title
Journal ISSN
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Publisher
Shanker Dev Campus
Abstract
This research delves into the financial performance of Nepalese development banks, employing a
meticulous examination through a blend of descriptive and causal research design. Initially
focusing on a population of 17 development banks, the study strategically narrows its scope to four
specific institutions, facilitating a nuanced and targeted analysis. The core of the research relies on
a ten-year historical dataset compiled from annual reports, utilizing predominantly secondary data.
Employing a sophisticated combination of statistical and financial tools, the analysis centers on
the impact of Cash Reserve Ratio (CAR), Credit to Deposit Ratio (CD ratio), and Asset Utilization
(AU) on key profitability indicators, namely Return on Assets (ROA) and Return on Equity (ROE),
with SPSS software aiding in detailed examinations. Selected independent variables, including
Cash Reserve Ratio, Credit to Deposit Ratio, Non-performing Loan, Net Profit to Total Loan and
Advance Ratio, and Interest Income to Total Loan and Advance Ratio, are thoughtfully chosen to
encompass multifaceted aspects of financial performance. The findings showcase a substantial
influence of these variables on ROE, underscoring their significance in shaping equity-related
dimensions of development banks. Conversely, an insignificant impact on ROA reveals nuanced
intricacies in overall asset management. This research contributes a nuanced understanding of
financial dynamics within the Nepalese development banking sector, offering valuable insights for
strategic decision-making and laying the groundwork for informed and targeted interventions in
the industry.
Keywords: Development Bank, Financial Performance, Liquidity