FINANCIAL PERFORMANCE OF JOINT VENTURE BANKS IN NEPAL

Abstract

The aim of this study is to assess the financial performance of seven commercial banks operating in Nepal, namely Himalayan Bank Limited, NABIL Bank Limited, Standard Chartered Bank Nepal Limited, SBI Bank Limited, Everest Bank Limited, NMB Bank Limited, and Nepal Bangladesh Bank Limited over the period from 2014/015 to 2022/023. The study employs quantitative analysis focusing on various financial metrics commonly used to evaluate bank performance. Key ratios such as profitability, liquidity, tangibility, size, and capital structure are utilized as reliable indicators of bank performance. The research investigates the significance and impact of key variables including Return on Assets (ROA), Earnings per Share (EPS), Size, Tangibility (Fixed Assets to Total Assets ratio - FA/TA), Liquidity (Loan and Advance to Total Deposit ratio - LA/TD), and Capital Structure (Total Debt to Total Assets ratio) across the selected banks (NMB, HBL, SCBNL, NABIL, SBI, EBL, and NBBL). The findings indicate a notable improvement in the overall financial performance of these banks over the eight-year period under analysis. Regarding statistical methods, the study utilizes correlation and regression analyses to test the relationships and significance of the identified variables. The regression model highlights that Return on Assets (ROA) positively influences Earnings per Share (EPS), Fixed Assets to Total Assets ratio (FA/TA), and Loan and Advance to Total Deposit ratio (LA/TD), while it negatively impacts the number of branches and Total Debt to Total Assets ratio. The study concludes that EPS and ROA have a significant and positive impact on the profitability performance of the sample banks, underscoring their stable capitalization and profitability throughout the study period. These findings suggest that the banks remained in a sound financial position despite fluctuations in economic conditions. This research provides insights into the financial health and performance of Nepalese commercial banks, emphasizing key metrics and their impacts on profitability, liquidity, and capital structure, thereby contributing to the understanding of the banking sector's dynamics in Nepal. Key Word: Financial Performance of Joint Venture Banks in Nepal