NET INTEREST INCOME (NII), NET INTEREST MARGIN (NIM) AND THE MANAGEMENT OF INTEREST-RATE RISK IN THE BANKING BOOK

2018 ◽  
pp. 343-374 ◽  
Keyword(s):  
Interest Rate ◽  
Interest Rate Risk ◽  
Interest Income ◽  
Rate Risk ◽  
Net Interest Margin ◽  
Interest Margin

Basel I to Basel III: Impact of Credit Risk and Interest Rate Risk of Banks in India

2018 ◽  
Vol 17 (1_suppl) ◽  
pp. S83-S111 ◽  
Author(s):  
Noor Ulain Rizvi ◽  
Smita Kashiramka ◽  
Shveta Singh
Keyword(s):  
Interest Rate ◽  
Credit Risk ◽  
Interest Rates ◽  
Banking System ◽  
Interest Rate Risk ◽  
Theoretical Background ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Rate Risk ◽  
Net Interest Margin

The study explores the theoretical background of Basel III and investigates the drivers of interest rate risk and credit risk of banks in various parlances, namely, pre and post the financial crisis, phases of implementation and ownership on a sample of 36 listed banks in India. The findings indicate that the high capital adequacy requirement (CAR) exhibits a positive relation with gross non-performing assets (GNPAs) and net interest margin (NIM). This is perhaps one of the major drawbacks of Basel implementation, which may become a cause of lower GDP in the future as explained in the findings of the literature. Originality/value: This article is perhaps the first attempt of its kind to empirically examine the bank-specific, macroeconomic variables and link it with the Basel implementation in the Indian banking system for the time period 2002–2015. This study endeavours to enhance the existing empirical research in the field and give insights into the role of various factors on GNPAs and interest rates (with regards to Indian banks).

TINGKAT SUKU BUNGA PINJAMAN DAN KINERJA KEUANGAN PERBANKAN: STUDI KASUS PADA BPR PT PRISMADANA

2011 ◽  
Vol 6 (2) ◽  
pp. 175
Author(s):  
Sarah Usman
Keyword(s):  
Interest Rate ◽  
Financial Performance ◽  
Secondary Data ◽  
Financial Statements ◽  
Interest Income ◽  
Net Interest Margin ◽  
Margin Analysis ◽  
Interest Margin

The purpose of this study is to analyze the role of loan interest and its implication towardsRural Bank’s financial performance. Database collected from primer data is based onobservation, meanwhile secondary data from Rural Bank’s financial statements during2006-2008 period. This study based on net interest margin analysis. The role of loan interestand it’s implication proxied by net interest income indicator.This study shows that anincrease in interest income (Net Interest Income) at Rural Bank due to an increase of it’slending activities for five years. Thus, loan interest income has important role on theincreasing perfomance of PTPrismadana rural bank's finance.Keywords: Interest Rate, Financial Performing, BPR

scholarly journals Assessing influence of factors on interest risk of commercial bank

2021 ◽  
Vol 2021 (1) ◽  
pp. 115-124
Author(s):  
Olga Mikhailovna Markova
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Interest Rates ◽  
Commercial Bank ◽  
Industrial Development ◽  
The United States ◽  
Interest Rate Risk ◽  
Interest Income ◽  
Rate Risk ◽  
The Impact

In modern conditions of the rapid industrial development the banks have to forecast their risks and profitability precisely, to apply information technologies to assess their activities. To evaluate the bank's income, it is necessary to carry out an internal analysis of its assets and liabilities and determine the factors effecting the bank's profitability by managing interest rate risk. The hypothesis of the study is the analysis of the impact on the net interest income and interest rate risk of a commercial bank of factors such as the exchange rate and the key rate of the Bank of Russia (for example, Sberbank, PJSC). There has been studied the impact of the factors (exchange rate and key interest rate of Central Bank of Russia) on the bank's net interest income by using correlation and regression analysis and building a regression model. Many tools are found to be used by the experienced analysts. One of the main tools is GAP analysis of interest rate risk. There have been illustrated the graphs of changes in interest rates of savings and loan associations during the crisis in the United States in the 1950-1960, of realization of interest rate risk with an increase in interest rates, the distribution of assets and liabilities according to the maturity of the balance sheet structure, the impact of changes in the interest rate GAP on net interest income, etc. A matrix of correlations of all variables in the sample (rates of growing values) was constructed. Conclusions are drawn on the need to use hedging instruments (interest rate swaps, interest rate options), as well as of attracting the most reliable data on the state of interest rate risk in the commercial banks.

Interest and credit risk management in German banks

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Vanessa Dräger ◽  
Lotta Heckmann-Draisbach ◽  
Christoph Memmel
Keyword(s):  
Risk Management ◽  
Interest Rate ◽  
Credit Risk ◽  
Interest Rate Risk ◽  
First Year ◽  
Credit Risk Management ◽  
Rate Risk ◽  
Net Interest Margin ◽  
Interest Level ◽  
Bond Portfolios

AbstractUsing unique data of a survey among small and medium-sized German banks, we analyze various aspects of risk management. We especially analyze the effect of a 200-bp increase in the interest level. We find that banks seem to reduce the volatility of their net interest margin by exposing themselves to interest rate risk, that they act as if they have a risk budget which they allocate either to interest rate risk or credit risk and that banks’ exposures to interest rate risk and to credit risk are remunerated. In addition, we find that, in the first year, the impairments of banks’ bond portfolios are much larger than the reductions in their net interest income, that banks attenuate the resulting write-downs by liquidating hidden reserves and that banks which use interest derivatives have lower impairments in their bond portfolios.

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