FINANCIAL PERFORMANCE ANALYSIS OF NEPALESE COMMERCIAL BANKS IN THE CAMEL FRAMEWORK

FINANCIAL PERFORMANCE ANALYSIS OF NEPALESE COMMERCIAL BANKS IN THE CAMEL FRAMEWORK

RADHA RANA

MBA Scholar

Abstract

This study has examined the financial performance analysis of Nepalese financial institutions in the framework of CAMEL. The descriptive and casual comparative research designs has been adopted for the study. Nine commercial banks has taken as a sample from the Judgmental sampling technique and has been analyzed using regression model. The regression results revealed that assets quality, capital adequacy ratio, management efficiency, return on equity has significant effect on return on assets. Return on assets has significant effect on return on equity, whereas liquid ratio, assets quality, capital adequacy ratio, management efficiency has insignificant effect on return on equity. This study concludes that capital adequacy ratio and return on assets are the most important factor that analyze the financial performance of financial institutions in the framework of CAMEL.

Key words: Return on assets, return on equity, assets quality, capital adequacy ratio, management efficiency, earning capacity and liquidity ratio