This study basically aimed to evaluate the impact of credit risk management and capital adequacy of financial performance in the Nepalese banking sector. However, the specific objectives of the study are: (a) to determine the trends of major indicator of bank performance, credit risk and capital adequacy, (b) to evaluate the explanatory power of bank capital adequacy in explaining cross-section of bank performance in Nepal, (c) to examine the causal relationship between bank performance and credit risk variables such as loans and advances, NPL and LLP, (d) to analyze the relationship of bank performance with liquidity (e) to examine whether factors of capital adequacy or credit risk alone can predict bank performance and (f) to analyze the opinions of bank staffs on factors of capital adequacy and credit risk affecting bank performance.
Based on the analysis of the data the major findings and observations of this study have been summarized in points below: The  analysis of the  structure  of  ROE  for  commercial bank  shows  that the  ROE of commercial banks is fluctuating around 6 percent to 43 percent on average  from 2007/08 through  2013. The lowest ROE was in year 20010/11 (15.45 percent) and highest in 2008/09 (25.07 percent) on an average.  Among others, Nepal Bangladesh bank has highest ROE of 43.59 percent and Machhapuchhre Bank has least ROE of 5.71 percent on an average over the study period. The correlation analysis depicts the positive relationship of ROE and ROA with capital adequacy ratio.In other hand, nonperforming loan to total loan, liquid assets to total loans & borrowings and loan loss provision to total loan of the bank documents the negative correlation. The highest correlation measured was 0.785 which is still below 0.80 which means overall result of the correlation matrix shows that there is no existence of multi co-linearity problem because all the correlations are below 0.8. In both model liquidity was found to be negatively significant with both ROA and ROE. Both CAR and LA were also found having positive relation with ROA and ROE but was not found significant in both cases. 
The finding of this study has supported many previous empirical studies. This study has compared result with previous studies related to impact of capital adequacy and credit risk on bank performance. The findings of this study have several implications for the policy maker and banks of Nepal.