Identifying the Determinants of Dividend Payout Ratios in Nepalese Commercial Banks

Authors

  • Bharat Ram Dhungana Pokhara University
  • Sushma Gautam Pokhara University
  • Deepesh Ranabhat Pokhara University
  • Deepak Ojha Pokhara University
  • Keshav Lamichhane Pokhara University
  • Sujana Acharya Pokhara University

DOI:

https://doi.org/10.3126/jbssr.v9i1.67984

Keywords:

bank size, commercial banks, dividend payout, liquidity

Abstract

The banking sector in Nepal has experienced significant growth since its formal inception, playing a crucial role in the country's economic development. This study aims to explore the factors influencing the dividend payout ratio in commercial banks of Nepal. The research is based on secondary data to analyse the commercial banks operating in Nepal. Quota sampling was employed to select seven banks, and data were analysed using descriptive and analytical research designs, along with statistical tools like regression analysis. The findings reveal that liquidity ratio and bank size have a significant positive impact on dividend payout ratios in Nepalese commercial banks. However, variables such as leverage, capital adequacy ratio, and profitability ratios exhibit insignificant relationships. Additionally, significant differences in dividend payout ratios, return on assets, leverage, and capital adequacy ratio were observed among different bank types. Higher liquidity ratios and larger bank sizes correspond to higher dividend payout ratios, indicating their pivotal role in shaping dividend policies in Nepalese commercial banks. Banks and financial institutions may focus on managing liquidity and expanding their size to enhance the dividend payout ratio.

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Author Biographies

Bharat Ram Dhungana, Pokhara University

Dr. Dhungana is Associate Professor at School of Management, Pokhara University. He has published several research papers in journals. He can be connected through dhunganabharat.pu@gmail.com.

Sushma Gautam, Pokhara University

Mr. Gautam is an MBA Graduate from School of Business, Pokhara University. He could be reached through sgtm999@gmail.com.

Deepesh Ranabhat, Pokhara University

Dr. Ranabhat is Assistant Professor at School of Management, Pokhara University. He can be connected through deepeshrana2000@gmail.com.

Deepak Ojha, Pokhara University

Mr. Ojha is Assistant Professor at School of Management, Pokhara University. He can be connected through
pokhara236@gmail.com.

Keshav Lamichhane, Pokhara University

Mr. Lamichhane is Assistant Professor at School of Management, Pokhara University. He can be connected through keshavlamichhane699@gmail.com.

Sujana Acharya, Pokhara University

Mr. Acharya is Assistant Professor at School of Management, Pokhara University. He can be connected through acharyasuzana@gmail.com.

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Published

2024-07-22

How to Cite

Dhungana, B. R., Gautam, S., Ranabhat, D., Ojha, D., Lamichhane, K., & Acharya, S. (2024). Identifying the Determinants of Dividend Payout Ratios in Nepalese Commercial Banks. Journal of Business and Social Sciences Research, 9(1), 1–16. https://doi.org/10.3126/jbssr.v9i1.67984

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Articles