Sahadev Bhatta

Does Market Power Affect Banking Dividend Policy? Evidence from Nepal

We attempt to explain how market power impacts bank dividend payment behaviors in Nepal by taking... more We attempt to explain how market power impacts bank dividend payment behaviors in Nepal by taking the sample from the commercial banking sector employing a panel data regression model. Using the Lerner Index (LI), a non-structural measure of market power or lack of competition, we found that market power inversely but statistically insignificantly affect dividend payment. This finding leads us to conclude that market power-a proxy of more or less competition is not an important and influencing factor to the dividend decisions in commercial banking sectors signifying that competition does not seem helpful in mitigating agency conflicts. It is also concluded that banking dividend payouts are not the result of the punitive influence of product market antagonism. Further, among other firm-specific determinants, bank size and leverage significantly positively whereas asset growth significantly negatively affect the dividend decision. However, profitability is found insignificant determin...

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Does Market Power Affect Banking Dividend Policy? Evidence from Nepal

We attempt to explain how market power impacts bank dividend payment behaviors in Nepal by taking... more We attempt to explain how market power impacts bank dividend payment behaviors in Nepal by taking the sample from the commercial banking sector employing a panel data regression model. Using the Lerner Index (LI), a non-structural measure of market power or lack of competition, we found that market power inversely but statistically insignificantly affect dividend payment. This finding leads us to conclude that market power-a proxy of more or less competition is not an important and influencing factor to the dividend decisions in commercial banking sectors signifying that competition does not seem helpful in mitigating agency conflicts. It is also concluded that banking dividend payouts are not the result of the punitive influence of product market antagonism. Further, among other firm-specific determinants, bank size and leverage significantly positively whereas asset growth significantly negatively affect the dividend decision. However, profitability is found insignificant determinant of dividend payment. The paper enriches and contributes to the literature on banking dividend payout and helps to identify the key factors that affect banking dividend decision-making.

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Literature Review on Corporate Capital Structure and Dividend Policy

Imperial journal of interdisciplinary research, 2016

This paper aims to review the literature in four main issues in the world of corporate finance, n... more This paper aims to review the literature in four main issues in the world of corporate finance, namely firms’ capital structure decisions and payout policies, in the context of developed as well as emerging markets. The research papers focused on impact of capital structure on firm’s profitability, firm value and corporate Governance as well as the impact of dividend payment on stock price. Various studies adopted quantitative method and examined by setting hypothesis and also few studies tried to construct models to demonstrate various relationship between dependent and independent variables. The review of solution approach, findings and future scope of the research papers is also carried out. The research related to corporate capital structure is carried out by referring 40 papers from year 2007 to 2014. The five stage literature review process was adopted. Depending upon the issues, the reviewed papers summary and find Key words: Capital structure, Corporate Governance, Dividen...

Influence of Liquidity on Profitability: Evidence from Nepalese Banks

International Journal of Multidisciplinary and Current Research, 2018

This study seeks to examine the relationship between the liquidity and the profitability of comme... more This study seeks to examine the relationship between the liquidity and the profitability of commercial Banks in Nepal. In this connection, 14 Nepalese commercial banks were selected as study samples and their financial data were gathered from the annual reports of concerned banks for the period of 2008-2017. In this study, Return on assets and net profit margin were used as indicator of profitability while liquidity ratio, investment ratio and capital ratio were used as a proxy of liquidity measures. This study used inferential statistics to explain the main features of a collection of data in quantitative terms while correlation and linear regression analysis are used for analyzing the data. Results showed that more than 49 percent bank profitability measured by return on assets and net profit margin is predicted by the liquidity variables. This empirical analysis reveals that there is insignificant positive relationship between liquidity ratio and return on assets. Similarly, ther...

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Capital Structure and Profitability of Commercial Banks in Nepal

Account and Financial Management Journal, 2020

This study seeks to examine the relationship between the capital structure and the profitability ... more This study seeks to examine the relationship between the capital structure and the profitability of commercial Banks in Nepal. In this connection, 18 Nepalese commercial banks were selected as study samples and their financial data were gathered from NRB BI Statistics and Bank Supervision Report for the period of 2010-2019. Return on Equity was used as indicator of profitability while short term debt, long term debt, deposits and total debt to assets ratio were used as a proxy of capital structure along with the control variables of bank size and assets growth. Results showed that more than 40 percent bank profitability measured by return on equity is predicted by the explanatory-capital structure variables. It is also revealed that return on equity is insignificantly positively related with long term debt and deposits whereas it is insignificant negative with short term debt and total debt. In all regression models, profitability is significantly positively related with banks size indicating that larger the size of the bank, higher is the return for shareholders.

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Influence of Liquidity on Profitability: Evidence from Nepalese Banks

International Journal of Multidisciplinary and Current Research, 2018

This study seeks to examine the relationship between the liquidity and the profitability of comme... more This study seeks to examine the relationship between the liquidity and the profitability of commercial Banks in Nepal. In this connection, 14 Nepalese commercial banks were selected as study samples and their financial data were gathered from the annual reports of concerned banks for the period of 2008-2017. In this study, Return on assets and net profit margin were used as indicator of profitability while liquidity ratio, investment ratio and capital ratio were used as a proxy of liquidity measures. This study used inferential statistics to explain the main features of a collection of data in quantitative terms while correlation and linear regression analysis are used for analyzing the data. Results showed that more than 49 percent bank profitability measured by return on assets and net profit margin is predicted by the liquidity variables. This empirical analysis reveals that there is insignificant positive relationship between liquidity ratio and return on assets. Similarly, ther...

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Dividend Policy and Share Price Volatility: Evidence from Commercial Banking Sector

International Journal of Modern Agriculture, 2021

Share price volatility is a matter of concern for management and investors. Hence, this study see... more Share price volatility is a matter of concern for management and investors. Hence, this study seeks to establish association between dividend policy and share price volatility of banks listed in Nepal Stock Exchange. Design/ Methodology/ Approach:The sample consists of 19 commercial banks covering a time span of 12 years from 2009 to 2020. On the basis of Baskin's basic model, we used three multiple panel data regression models by adopting 3 explanatory variable of dividend policy such as dividend per share, dividend payout ratio and dividend yield separately and controlling for bank size, asset growth, financial leverage and earning volatility. Findings:The empirical finding evidenced that dividend yield appears to the most significant predictor of share price volatility in commercial banking sector along with their size and earning volatility. There is inverse prediction of dividend yield and bank size whereas earning volatility has the positive effect on share price volatility. Originality/Value:The study is original and valuable as it explores the banking firm's share price volatility and dividend policy in a developing country for recent and new data set focusing on commercial banks listed in Nepal Stock Exchange.

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Literature Review on Corporate Capital Structure and Dividend Policy

Imperial Journal of Interdisciplinary Research (IJIR), 2016

This paper aims to review the literature in four main issues in the world of corporate finance, n... more This paper aims to review the literature in four main issues in the world of corporate finance, namely firms' capital structure decisions and payout policies, in the context of developed as well as emerging markets. The research papers focused on impact of capital structure on firm's profitability, firm value and corporate Governance as well as the impact of dividend payment on stock price. Various studies adopted quantitative method and examined by setting hypothesis and also few studies tried to construct models to demonstrate various relationship between dependent and independent variables. The review of solution approach, findings and future scope of the research papers is also carried out. The research related to corporate capital structure is carried out by referring 40 papers from year 2007 to 2014. The five stage literature review process was adopted. Depending upon the issues, the reviewed papers summary and find

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Influence of Liquidity on Profitability: Evidence from Nepalese Banks

International Journal of Multidisciplinary and Current Research, 2018

This study seeks to examine the relationship between the liquidity and the profitability of comme... more This study seeks to examine the relationship between the liquidity and the profitability of commercial Banks in Nepal. In this connection, 14 Nepalese commercial banks were selected as study samples and their financial data were gathered from the annual reports of concerned banks for the period of 2008-2017. In this study, Return on assets and net profit margin were used as indicator of profitability while liquidity ratio, investment ratio and capital ratio were used as a proxy of liquidity measures. This study used inferential statistics to explain the main features of a collection of data in quantitative terms while correlation and linear regression analysis are used for analyzing the data. Results showed that more than 49 percent bank profitability measured by return on assets and net profit margin is predicted by the liquidity variables. This empirical analysis reveals that there is insignificant positive relationship between liquidity ratio and return on assets. Similarly, there is insignificant negative relationship between investment ratio and capital ratio with return on assets. It is also found that there is insignificant positive relationship of net profit margin with liquidity ratio and investment ratio. However the net profit margin is significantly negatively related with capital ratio. Based on the results it is concluded that the liquidity measure are not statistically significant in determining the profitability of commercial banks in Nepal except the capital ratio.

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Factors Influencing Customers' Bank Selection Decision in Nepal

International Journal of Advanced Science and Technology, 2020

The research attempts to study the bank selection criteria of the Nepalese customers. The researc... more The research attempts to study the bank selection criteria of the Nepalese customers. The research is done through distributing and collecting 137 questionnaires to participants/respondents from the defined population of the clients of commercial bank in Bhairahawa city, Nepal. Respondent's views were presented and examined with test of reliability, descriptive statistics and Exploratory Factor Analysis (EFA). A finding from the study reveals that reliability is the most important criteria/factor influencing the customer in choosing a bank. The factor analysis results revealed that reliability and convenience are the most important determinants of bank choice. In contrast, value added services and responsiveness were the two least significant attributes of bank selection for Nepalese customers.

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Capital Structure and Profitability of Commercial Banks in Nepal

Account and Financial Management Journal, 2020

This study seeks to examine the relationship between the capital structure and the profitability ... more This study seeks to examine the relationship between the capital structure and the profitability of commercial Banks in Nepal. In this connection, 18 Nepalese commercial banks were selected as study samples and their financial data were gathered from NRB BI Statistics and Bank Supervision Report for the period of 2010-2019. Return on Equity was used as indicator of profitability while short term debt, long term debt, deposits and total debt to assets ratio were used as a proxy of capital structure along with the control variables of bank size and assets growth. Results showed that more than 40 percent bank profitability measured by return on equity is predicted by the explanatory-capital structure variables. It is also revealed that return on equity is insignificantly positively related with long term debt and deposits whereas it is insignificant negative with short term debt and total debt. In all regression models, profitability is significantly positively related with banks size indicating that larger the size of the bank, higher is the return for shareholders.

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