Measuring The Financial Stability of Nepalese Commercial Banks: A Decade Long Study

This study assesses the financial stability of fifteen Nepalese commercial banks over a decade (2014/15–2023/24) using the CAMEL framework, addressing the lack of long-run comparative evaluations in emerging economies. Using descriptive statistics, the analysis examines trends and variability in capital adequacy, asset quality, management efficiency, earnings, and liquidity. Results show that all banks consistently met regulatory thresholds, reflecting strong capitalization, sound credit risk management, and stable liquidity positions. Capital adequacy remained well above the minimum requirement, NPL ratios stayed below 5%, and ROA indicated effective managerial performance, though ROE exhibited moderate volatility due to interest-rate sensitivity. Liquidity remained robust across banks, supporting sustainable credit operations. Overall, the decade-long evidence confirms that Nepalese commercial banks have maintained resilient financial health, demonstrating stability, profitability, and capacity to absorb shocks, while offering regulators and policymakers a clearer understanding of the system’s long-term performance dynamics.