Open Access Open Access  Restricted Access Subscription Access

STUDY OF NON-PERFORMING ASSETS IN BANKS WITH SPECIAL REFERENCE TO NABIL BANK LIMITED, NEPAL

Mahesh Abale, Devyani Ingale

Abstract


Non-performing Asset (NPA) has emerged since over a decade as an alarming threat to the banking industry in country, sending distressing signals on the sustainability and en-durability of the affected banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. The problem of NPAs is not only affecting the banks but also the whole economy. This paper deals with understanding the concept of NPAs, its magnitude and major causes for an account becoming non-performing and also strategies for reducing NPAs. This research attempts to analyze the level of Nonperforming assets in context of Nabil Bank Limited. Researcher examines the trend of nonperforming assets level of Nabil Bank Limited and other banking business of Nepal.

Several prudential and provisioning norms have been introduced, and these are pressurizing banks to improve efficiency and trim down NPAs to improve the financial health in the banking system. In the background of these developments, this study strives to examine the state of affair of the Non Performing Assets (NPAs) of the NABIL Bank Limited. The study is based on the secondary data retrieved from Report on Trend and Progress of Banking in Nepal. The scope of the study is limited to the analysis of NPAs of the Nabil Bank Limited, Nepal for the period seven (6) years i.e. from 2006-2011. The study based on financial data obtained from the Bank in the form of the annual reports for 6 financial years under consideration (2005-06 to 2010-11).


References


Alam, H. M., Raza, A., & Akram, M. (2011). A financial performance comparison of public vs private banks: The case of commercial banking sector of Pakistan. Int. J. Bus. Soc. Sci., 2(11), 56-64.

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Int. Finan. Mark. Inst. Money, 18, 121-136.

Avkiran, N. K. (1995). Developing an instrument to measure customer service quality in branch banking. Int. J. Banks Mark., 12(6), 10-18.

Bakar, N., & Tahir, I. M. (2009). Applying multiple linear regression and neural network to predict bank performance. Int. Bus. Res., 2(4), 176-183.

Baral, J. K. (2005). Health check-up of commercial banks in the framework of CAMEL: A case study of joint venture banks in Nepal. J. Nepalese Bus. Stud., 2(1), 41-55.

Buyuksalvarci, A., & Hasan, A. (2011). Determinants of capital dequacy ratio in Turkish Banks: A panel data analysis. Afr. J. Bus. Manag., 5(27), 11199-11209.

Elyor, S. (2009). Factors affecting the performance of foreign banks in Malaysia (Master’s Thesis). Economic Survey (2008). Ministry of Finance, Government of Nepal. Univ. Utara Malaysia.

Gopinathan, T. (2009). Financial ratio analysis for performance check. Retrieved from http://suite101.com/article/financial-ratio-analysis-for-performancecheck-a109025

Ho., C., & Zhu, D. (2004). Performance measurement of Taiwan commercial banks. Int. J. Product. Perform. Manag., 53(5), 425-434.

Koasmidou, K. (2008). The determinants of banks’ profits in Greece during the period of EU financial integration. Manag. Financ., 34(3), 146-159.

Levine, R. (1997). Financial development and economic growth: views and agenda. Retrieved from http://web.nps.navy.mil/~relooney/levine.pdf

Lin, W. C., Li, C. F., & Chu, C. W. (2005). Performance efficiency evaluation of the Taiwan’s shipping industry: an application of data envelopment analysis. In Proceedings of the Eastern Asia Society for Transportation Studies, 5, 467-476.

McKinnon, R. I. (1973). Money and capital in economic development. Washington, DC: The Brookings Institution.

Northcott, C. (2004). Competition in banking: Areview of the literature (Working Papers). Bank of Canada, 4-24.

NRB (2010). Banking supervision (Annual report). Bank Supervision Department, Nepal Rastra Bank, Central Bank of Nepal.

Olweny, T., & Shipho, T. M. (2011). Effects of banking sectrol factors on the profitability of commercial banks in Kenya. Econ. Financ. Rev., 1(5), 1-30.

Paudel, N. P. (2005). Financial system and economic development. Kathamndu: Nepal Rastra Bank, Nepal Rastra bank in 50 years.

Raza, A., Farhan, M., & Akram, M. (2011). A comparison of financial performance in investment banking sector in Pakistan. Int. J. Bus. Soc. Sci., 2(11), 72-81.

Rose, P. S., & Hudgins, S. C. (2006). Bank Management & Financial Services (6th ed.). New York: McGraw-Hill.

Sangmi, M. D., & Nazir, T. (2010). Analyzing financial performance of commercial banks in India: Application of CAMEL model. Pak. J. Commer. Soc. Sci., 4(1), 40-55.

Retrieved from www.nabilbank.comfinancial

Retrieved from www.nrb.org.np


Full Text: PDF

Refbacks

  • There are currently no refbacks.


International Journal of Applied Financial Management Perspectives © Pezzottaite Journals.