Impact of Liquidity on Profitability in Nepalese Commercial Banks

Adhikari, Khagendra

doi:10.3126/jom.v3i1.30912

Cited by 2 publications

(4 citation statements)

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“…It concluded that the independent variable has not significantly influenced profitability but has a strong and positive relationship between independent and dependent variables. The finding is similar to Adhikari's (2021) study, who has revealed that the liquidity variables have no significant impact on profitability.…”

Section: Discussionsupporting

confidence: 90%

“…This research signifies that Bangladeshi bank will be best positioned if the equality between liquidity and profitability is maintained. Adhikari (2021) revealed the negative relationship between Liquidity and Profitability. The liquidity indicators positively and negatively impacted net profit margin, stock price, and earnings per share, but the impacts were statistically insignificant, and the overall model was also insignificant.…”

Section: A Peer-reviewed Journal Of Management and Economicsmentioning

confidence: 99%

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Liquidity and Profitability of Low and High Turnover Commercial Banks in Nepal

Goet

2021

Management Dynamics

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This paper explores the effect of several bank-specific variables, including capital and liquidity, on the profitability of listed commercial banks operating in Nepal. Factors of banks’ profitability like net profit ratio, return on assets, and return on equity have been assessed by the panel data (10 observations) of six listed banks out of twenty-seven banks. In this study, liquidity has been quantified in regulatory capital, loan and advance to total deposit, liquid assets to total assets, liquid assets to total deposit, and cash reserve ratio. This study found a significant correlation between liquidity variables and profitability variables. Again, it has been shown that the cash reserve ratio significantly impacts the net profit ratio, return on assets, and equity. Likewise, loan and advance to total deposit, liquid assets to total assets, and liquid assets to total deposit have no significant impact on the selected banks’ net profit ratio, return on assets, and return on equity.

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Section: Discussionsupporting

confidence: 90%

Section: A Peer-reviewed Journal Of Management and Economicsmentioning

confidence: 99%

Liquidity and Profitability of Low and High Turnover Commercial Banks in Nepal

Goet

2021

Management Dynamics

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“…The researcher observed from empirical review of literatures that the findings from the subject matter still remain relatively inconclusive and conflicting findings. have reported a negative significant relationship between liquidity and financial performance of deposit money banks globally (Sathyamoorthi et al, 2020;Eze & Agu, 2020), while other studies reported no significant impact of liquidity on financial performance of commercial banks (Adhikari, 2020). The inconsistent results could be a result of changes in the study's environment, time period, measurements, data analysis method, or analysis tools.…”

Section: Literature Gapmentioning

confidence: 95%

“…Additionally, to establish the effect of liquidity on profitability, Adhikari (2020) studied the effect of of liquidity on profitability in Nepalese commercial banks. 27 out of 28 commercial banks in Nepal were used for the analysis.…”

Section: Empirical Reviewmentioning

confidence: 99%

The Impact of Liquidity Risk on Profitability of Listed Deposit Money Banks in Nigeria

Olofin,

Muritala,

Maitala

et al. 2024

J. Professional Business Review

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Objective: The study examined the relationship between liquidity risk and the profitability of Nigeria's listed deposit money banks in Nigeria over a 16 years period from 2008 to 2023. Method: Panel data on cash reserve ratio, liquidity ratio, loan to deposit ratio, and return on equity were collected from the annual reports and financial statements of the five systemic banks listed on Nigerian Exchange Group from 2008-2023. Ordinary least square regression analysis, panel unit root test, Hausman test were used in analysing the data. Results: The study found a significant positive relationship between the cash reserve ratio, loan to deposit ratio and profitability of Nigerian deposit money banks. But liquidity ratio has a negative but insignificant relationship with profitability of deposit money banks in Nigeria. Conclusion: Based on the findings, the research recommends that the Central Bank of Nigeria (CBN) must act quickly to lower cash reserve ratios in order to help Nigeria's deposits banks operate more effectively. Banks should engage competent and qualified personnel in order to ensure that right decision are adopted with regard to the optimal level of liquidity and the loan-to-deposit ratio should be fully utilized by banks to support sales initiatives.

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Impact of Liquidity on Profitability in Nepalese Commercial Banks

Cited by 2 publications

References 0 publications

Liquidity and Profitability of Low and High Turnover Commercial Banks in Nepal

Liquidity and Profitability of Low and High Turnover Commercial Banks in Nepal

The Impact of Liquidity Risk on Profitability of Listed Deposit Money Banks in Nigeria

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