DETERMINANTS OF CAPITAL ADEQUACY RATIO OF NEPALESE COMMERCIAL BANKS
Date
2024
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Shanker Dev Campus
Abstract
The objectives of the study are explore the current status of the Return on Assets, Return
on Equity, Liquidity Risk, Credit Risk, and Deposit to Assets Ratio, Loan to Assets, Gross
Domestic Product and Capital Adequacy Ratio of the commercial bank in Nepal, to analyze
the relationship of Return on Assets, Return on Equity, Liquidity Risk, Credit Risk, and
Deposit to Assets Ratio, Loan to Assets and Gross Domestic Product to the Capital
Adequacy Ratio of the commercial bank in Nepal and to examine the impact of Return on
Assets, Return on Equity, Liquidity Risk, Credit Risk, and Deposit to Assets Ratio, Loan
to Assets and Gross Domestic Product to the Capital Adequacy Ratio of the commercial
bank in Nepal. The descriptive and casual comparative research has been used for the
analysis of the research. The secondary data are collected from the annual report of the
bank. The descriptive statistics, correlation and regression analysis conducted for the
research objective achieve. It is found that the different between the mean and maximum,
minimum and maximum, mean and minimum is higher, the standard deviation is also
higher so the all the dependent and independent variables current situation is fluctuating in
nature. The relationship of return on assets, credit risk and loan to assets ratio is not
significant to the capital adequacy ratio. The return on equity, liquidity risk, and deposit to
assets ratio and gross domestic product is significant relationship to the capital adequacy
ratio. The impact of Return on Assets and Return on Equity is significant to the capital
adequacy ratio. The impact of Liquidity Risk, Credit Risk, Deposit to Assets Ratio, Loan
to Assets and Gross Domestic Product have not significant impact to the capital adequacy
ratio.
Keywords: Return on Assets, Return on Equity, Liquidity Risk, Credit Risk, Deposit
to Assets Ratio, Loan to Assets and Gross Domestic Product.