Impact of Liquidity in the Profitability of Nepalese Commercial Banks on Quarterly Basis
Banking sector faced the problem of liquidity and such problem drive banks towards the loss. Liquidity management is one of the techniques to optimize the profitability in the banks. For such analysis where the quarterly impact on liquidity on the Nepalese commercial banks were assessed. Secondary research with exploratory research design including two dependent and five independent variable were employed. Quantitative approach where data were extracted on quarterly basis from year 2014 to 2018 of 13 different commercial banks. Various statistical tools and applied econometrics namely, descriptive statistics, Shapiro-Wilk test, Pearson Correlation test, OLS and GLS are employed. For the better forecasting of the profitability variable the test of heteroscedasticity using Koenker test, test of autocorrelation using DW test and for multicollinearity diagnostic the VIF analysis is used. Using the balanced panel data of 260 observations, the overall analysis showed that, the liquidity variables had the impact on the profitability measures; the impact is negative in overall. Positive or same directional relationship were found with profitability with respect to bank size and cash to total assets and capital adequacy ratio, non-performing loan, & credit to deposit ratio were found negative or opposite directional relationship with the profitability. For this research the OLS and GLS model were used, where the GLS is adopted to adjust the violation of the OLS. The use of OLS in the Panel data occur the autocorrelation which provides the inefficient forecasting. So, the variable transformation as per the GLS is necessary to provide the efficient forecasting. This research also provides the usefulness of GLS model in case of panel data
Year of publication: |
[2022]
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Authors: | Sharma, Sushil Prasad |
Publisher: |
[S.l.] : SSRN |
Subject: | Rentabilität | Profitability | Nepal | Bank | Liquidität | Liquidity |
Saved in:
freely available
Extent: | 1 Online-Ressource (21 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 25, 2019 erstellt |
Other identifiers: | 10.2139/ssrn.4004372 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013297833
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