BANCASSURANCE IN THE NEPALESE BANKING INDUSTRY: A STUDY OF

SELECTED FINANCIAL PERFORMANCE INDICATORS.

A Graduate research projectPresented BY:

Rupesh NyaupaneExam Roll NO: 14220471

P.U. registration NO: 2014-2-22-0170

Presentation overviewIntroductionStatement of the Problem Objectives of the StudyTheoretical FrameworkResearch Design and MethodologyResearch Findings

Respondent profileDescriptive AnalysisSummary of Hypothesis testingRegression analysis

Conclusion

Introduction

• Bancassurance = “Banca” + “Assurance”.

• it means banks selling insurance products.

• Collaboration between Bank and Insurer to distribute insurer’s products• Insurer – provider of products and services – insurance risk

taker• Bank – distributor.

Cont..

• Distribution of insurance product through banks distribution channel.• Liquidity, Assets quality and capital adequacy helps to measure

financial performance of banks.• Liquidity: The degree to which an assets or security can be quickly

bought and sold in the market without affecting the assets price.• Assets quality: loan is the main assets of banks. sounds assets quality

involves careful granting the loan.• Capital adequacy: Amount of capital to recover in case of failure of

banks.

Statement of the problem

• Bancassurance is the new concept in Nepalese banking sectors.• Many commercial banks started selling insurance policies.• It is beneficial to banks, insurance companies and customers.• Bancassurance influence the liquidity, assets quality, and capital

adequacy of banks.• The influence of bancassurance towards the financial performance of

banking industries has not yet been understood.

Objectives of the Study

• To evaluate the influence of bancassurance on capital adequacy of commercial banks in Nepal.

• To determine the influence of bancassurance on assets quality of commercial banks in Nepal.

• To examine the influence of bancassurance on liquidity of commercial banks in Nepal.

Theoretical Framework

Independent Variable Dependent Variables

Bancassurance

Liquidity

Assets Quality

Capital Adequacy

Research Design and Methodology

• Research Design• Quantitative research• Survey method

• Sampling Method• Convenience Sampling

• Sampling Instrument• Self-administered questionnaire

• Sample size• 96 respondents.

Research Findings

72.9

27.1

Gender of the Respondents

Male Female

Qualification of Respondents

2.1

58.339.6

Qualification

Intermediate Bachelor degree Master and above

Age group of Respondents

47.9245.83

6.25

Age group

20-25 25-30 30 and above

Descriptive Findings

Variables Mean Standard deviation

Bancassurance 4.3629 1.010

Liquidity 4.345 0.9415

Capital Adequacy 4.3 1.10075

Assets Quality 4.20 0.985

Correlation Analysis

Variables conclusionLiquidity Pearson correlation

Sig (1-tailed).5800.000

Positive and significant relationship.

Capital Adequacy

Pearson correlation Sig (1-tailed)

.5020.000

Positive and significant relationship.

Assets Quality Pearson correlation Sig (1-tailed)

.5740.000

Positive and significant relationship.

Regression analysis ( Model summary)Model R R square Standard error

of estimation

liquidity .580 .337 .58128

Assets quality .574 .329 .59457

Capital adequacy

.502 .252 .75842

Regression Analysis

variables Beta coefficients

Bancassurance & Liquidity .689, (P < 0.01)

Bancassurance & capital Adequacy .692, (P < 0.01)

Bancassurance & Assets Quality .700, (P < 0.01)

Hypothesis Testing

S.N Hypothesis Testing Decisions

1. There is positive relationship between bancassurance and Liquidity.

Accepted

2. There is positive relationship between bancassurance and Capital Adequacy.

Accepted

3. There is positive relationship between bancassurance and assets Quality.

Accepted

Conclusion

• There is a influence of bancassurance towards the liquidity of banking industry.

• Bancassurance helps to improve the Capital adequacy ratio of banking industry.

• Bancassurance affects the assets quality of banking industry.

• Bancassurance has strong impact on the financial performance of banking industry.

Recommendation

• Determinants of financial performance.

• Sample size .

• Recommendation to manager: Bancassurance helps to improve financial position.

THANK YOU