scholarly journals The financial and prudential performance of Chinese banks and Fintech lenders in the era of digitalization

2022 ◽  
Author(s):  
Paraskevi Katsiampa ◽  
Paul B. McGuinness ◽  
Jean-Philippe Serbera ◽  
Kun Zhao
Keyword(s):  
Initial Period ◽  
Preliminary Evidence ◽  
Operating Costs ◽  
Growth Options ◽  
Profit Margins ◽  
Chinese Banks ◽  
Special Mention ◽  
Loan Quality ◽  
Bank Group ◽  
Asset Quality

AbstractThe years 2013 to 2019 marked an explosion in Fintech in China. We analyze the financial and prudential performance of 40 exchange-traded banks and 25 listed Fintech lenders in China during this watershed period. Among other things, traditional banks experienced rising operating costs, declining profit margins and softening loan quality. Consistent with a process of adaptation, traditional bank performance stabilized in the latter part of the study period (2018-19) after an initial period of decline. Study findings also highlight rising business and regulatory costs for Fintech providers over the course of the study frame. A marked deterioration in online lenders’ Special Mention and Non-Performing Loan (SML & NPL) positions arose during the period. Within the traditional bank group, smaller entities with fewer growth options and greater foreign ownership fared worst in prudential terms. Traditional banks’ financial and prudential performance also declines with time since IPO. Relative to joint stock commercial, city and rural banks, state-owned lenders registered more resilient performance, especially in relation to asset quality. In a final area, we construct a categorical Fintech proficiency variable for China's established banks. Our preliminary evidence suggests such proficiencies help stabilize SML and NPL rates and support financial returns. Overall, we offer major contribution to the banking literature by analyzing the financial and prudential performance of both incumbent and emerging lenders in one of the world’s most dynamic Fintech settings.

Food Malayan Berhad’s Intention to Grow Its Businesses

2016 ◽  
Vol 5 (1) ◽  
pp. 72-81
Author(s):  
Albert Tan ◽  
Sumit Mitra
Keyword(s):  
Food Industry ◽  
Growth Strategy ◽  
Operating Costs ◽  
Competitive Environment ◽  
Profit Margins ◽  
Business Objectives ◽  
Fierce Competition ◽  
A Company

This case concerns and discusses how a company can shape its growth strategy, given the current competitive environment and increasing operating costs. The case will help students to realize the important of aligning its business objectives with its operations. The food industry is facing declining profit margins due to fierce competition internally and also from overseas competitors. It is, therefore, important to align its strategies with its operations to grow its revenue while reducing its operating costs.

Bank Lending Margins in China and the Effects of the June 2012 Liberalization

2014 ◽  
Vol 05 (02) ◽  
pp. 1450003 ◽  
Author(s):  
Richard C. K. Burdekin ◽  
Ran Tao
Keyword(s):  
Interest Rate ◽  
Event Study ◽  
Commercial Banks ◽  
Financial Liberalization ◽  
Initial Response ◽  
Bank Lending ◽  
Profit Margins ◽  
Share Prices ◽  
Chinese Banks ◽  
First Time

Financial liberalization in China has begun to allow more flexibility in bank interest rate setting but may threaten bank profit margins. This paper documents the initial response to the June 2012 initiative that, for the first time, allowed Chinese banks to meaningfully depart from the benchmark rates laid down by the People's Bank. We use an event study to assess the initial effects on bank share prices and compare the response of the larger state-owned banks to the smaller commercial banks. We identify significant reactions in both the Shanghai and Hong Kong markets.

scholarly journals Impact of Loan Quality, Funding Management and Asset Quality on Liquidity Risk Management of Pakistani Banks

2018 ◽  
Vol 3 (1) ◽  
pp. 65-83
Author(s):  
Hassan Akram ◽  
◽  
Khalil ur Rahman ◽  
Ghulam Abbas ◽  
◽  
...  
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Loan Quality ◽  
Asset Quality

scholarly journals Management of NPA via Capital Adequacy Norms: Its Effect Upon The Profile of Indian Banks and Credit Deposit Ratio

2016 ◽  
Vol 3 (1) ◽  
pp. 62
Author(s):  
Ramesh Chandra Das ◽  
Arun Kumar Patra ◽  
Utpal Das
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Foreign Banks ◽  
Committee Report ◽  
Reform Agenda ◽  
Significance Levels ◽  
Back Ground ◽  
Indian Banks ◽  
Bank Group ◽  
Asset Quality

<div><p>The reform agenda in the financial as well as banking sector in the Indian economy was not only in the target of achieving profitable banking business but also to reduce the magnitude of banking funds locked in the bad debt account so that, among others, the real delivery of credit (the credit-deposit ratio) rises in overall fronts. The Narasimham Committee Report in respect of reducing magnitude of non- performing assets has been framed in line with the Basel Norm regarding the asset quality of the banks where capital adequacy ratio has been fixed for different banks to achieve within different time periods. The present study, under such a back ground, has been structured to examine the profile of all Scheduled Commercial Banks in all ranges of CRAR over time in aggregate and bank group specific and to measure degree of correlation of NPA-Deposit ratio with CRAR trends and Credit-Deposit Ratio in all ranges of CRAR and their significance levels for the time period 1995-96 to 2009-2010. It has been observed that there has been variation across banks in following the guidelines of the reform committee. SBI group and foreign banks have been performing well in this respect. There has been rising trend of the proportions of banks in the above 10 per cent range of CRAR. The NPA/D ratio and C-D ratio have been observed to be positively and negatively correlated respectively for the first three ranges of CRAR and reverse in the above 10 per cent range. The correlation between the NPA/D ratio and C-D ratio is negative and significant.</p></div>

scholarly journals Management of NPA via Capital Adequacy Norms

2014 ◽  
Vol 3 (1) ◽  
pp. 62-74
Author(s):  
Ramesh Das ◽  
Arun Kumar Patra ◽  
Utpal Das
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Foreign Banks ◽  
Committee Report ◽  
Reform Agenda ◽  
Significance Levels ◽  
Back Ground ◽  
Banking Business ◽  
Bank Group ◽  
Asset Quality

The reform agenda in the financial as well as banking sector in the Indian economy was not only in the target of achieving profitable banking business but also to reduce the magnitude of banking funds locked in the bad debt account so that, among others, the real delivery of credit (the credit-deposit ratio) rises in overall fronts. The Narasimham Committee Report in respect of reducing magnitude of non- performing assets has been framed in line with the Basel Norm regarding the asset quality of the banks where capital adequacy ratio has been fixed for different banks to achieve within different time periods. The present study, under such a back ground, has been structured to examine the profile of all Scheduled Commercial Banks in all ranges of CRAR over time in aggregate and bank group specific and to measure degree of correlation of NPA-Deposit ratio with CRAR trends and Credit-Deposit Ratio in all ranges of CRAR and their significance levels for the time period 1995-96 to 2009-2010. It has been observed that there has been variation across banks in following the guidelines of the reform committee. SBI group and foreign banks have been performing well in this respect. There has been rising trend of the proportions of banks in the above 10 per cent range of CRAR. The NPA/D ratio and C-D ratio have been observed to be positively and negatively correlated respectively for the first three ranges of CRAR and reverse in the above 10 per cent range. The correlation between the NPA/D ratio and C-D ratio is negative and significant.

Determinants of Auditor Going Concern Reporting in the Banking Industry

2018 ◽  
Vol 37 (4) ◽  
pp. 187-205 ◽  
Author(s):  
Adi Masli ◽  
Christine Porter ◽  
Susan Scholz
Keyword(s):  
Capital Adequacy ◽  
Bank Failures ◽  
Type I ◽  
Going Concern ◽  
Audit Market ◽  
Loan Quality ◽  
Asset Quality ◽  
Type Ii Errors ◽  
Going Concern Reports ◽  
Shed Light

SUMMARY We develop and test a model of the determinants of going concern reporting for banks. Banks are an essential component of the economy, but most audit market studies exclude them because they have significant differences from other companies. Our model draws on banking literature and industry sources to identify bank-specific risk factors, including measures of capital adequacy, asset quality, liquidity, and regulatory concern. We find that regulatory sanctions are a significant determinant of going concern opinions along with low capitalization, poor loan quality, and declining customer deposits and that these are incremental to characteristics drawn from studies of other industries. Also, going concern reports anticipate bank failures and provide descriptive evidence regarding Type I and Type II errors. We shed light on the audit market for banks and add to the going concern literature by providing evidence on going concern reporting in this unique industry.

scholarly journals Cost Economies for an Airline: An Analysis of Airlines’ Operating Costs

2019 ◽  
Vol 12 (3) ◽  
pp. 1856-1859
Author(s):  
Harendra Nishantha Kariyawasam
Keyword(s):  
Economies Of Scale ◽  
Low Cost ◽  
Operating Cost ◽  
Operating Costs ◽  
Asia Pacific ◽  
Profit Margins ◽  
Cost Structures ◽  
Low Cost Carriers ◽  
Average Operating ◽  
The Cost

This study focuses on analyzing the variables affecting the average operating cost per aircraft movement. Since airlines around the world are operated on thin profit margins and with increasing competition from Low Cost Carriers it will be important for an airline to get a complete understanding about their operating cost structure. The aim of this study is to suggest an airline of actions to reduce their operating cost and will differentiate the cost structures of Low Cost Carriers and Full Service Carriers. This study was conducted for 20 airlines which were operating in Asia Pacific region. Published financial and statistical data were used for analysis and a parametric approach was used. The results of this study do not suggest economies of scale for the airline, which is to have higher number of aircraft to reduce cost.

scholarly journals Determinants of Non-Performing Loans: Evidence from Europe

2018 ◽  
Vol 13 (10) ◽  
pp. 230
Author(s):  
Antonio Salvi ◽  
Candida Bussoli ◽  
Lavinia Conca ◽  
Marisa Gigante
Keyword(s):  
Panel Data ◽  
Unemployment Rate ◽  
Multivariate Regression ◽  
Gdp Growth ◽  
International Level ◽  
Macroeconomic Indicators ◽  
European Banks ◽  
Loan Quality ◽  
Asset Quality ◽  
The Impact

The issue of banks&rsquo; loan quality has assumed growing importance at the international level. This study aims to tackle the issue and to verify the impact of bank-specific determinants and macroeconomic indicators on banks&rsquo; loan quality. The analysis is conducted on a sample of 2,816 European banks over the period 2011-2015 through a multivariate regression with panel data. The main evidence shows that a higher return on average assets and a greater soundness of the bank can be associated with a better loan quality. Furthermore, the results also demonstrate that system conditions can contribute to determining banks&rsquo; asset quality. Adverse cyclical conditions, resulting from a lower GDP growth and a higher unemployment rate, can generate a lower loan quality.

scholarly journals Effects of banking scale and operating expenses to profit of joint stock commercial banks in Vietnam

2021 ◽  
Vol 5 (2) ◽  
pp. first
Author(s):  
Tâm Thanh Trần ◽  
Lê Vũ Tường Vy
Keyword(s):  
Financial Market ◽  
Commercial Banks ◽  
Operating Cost ◽  
Operating Costs ◽  
Parameter Estimates ◽  
Factors Affecting ◽  
Profit Margins ◽  
The Past ◽  
Business Operations ◽  
The Stability

The operation of the bank is an important economic activity, which has contributed significantly to the development of the national economy over the past years. Therefore, the efficiency in the business operations of joint stock commercial banks is a topic that needs to be addressed, as it directly affects the efficiency in providing capital to businesses, as well as the stability and development of the financial market. Determining the factors affecting the profitability of joint-stock commercial banks will help managers to operate the bank's operations more efficiently. The purpose of this paper is to examine whether the profitability of a joint stock commercial bank in Vietnam is affected by its size and operating costs. All parameter estimates of the regression model are based on regression analysis of the random effects table of REM. Data of the study included 28 joint stock commercial banks in Vietnam for the period of 2012-2019. Empirical research results show that the bank's profit is affected by financial leverage and more particularly, there exists a positive correlation of the bank size and the operating cost on the bank's profit. The fact that larger banks are more competitive has the ability to diversify their asset portfolios, focus on higher profit margins, and spend money to investment, upgrading of service quality and facilities lead to increased operating costs, thereby reducing risks and increasing profits.

scholarly journals The Vanishing Interest Income of Chinese Banks

2021 ◽  
pp. 1-20
Author(s):  
Karlo Kauko
Keyword(s):  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Bank Loan ◽  
Frontier Analysis ◽  
Nonperforming Loans ◽  
Loan Portfolios ◽  
Interest Income ◽  
Chinese Banks ◽  
Loan Quality

Abstract Chinese banks likely have more nonperforming loans (NPLs) than officially reported. Banks’ NPLs often deviate from Benford's law. As hidden NPLs earn no interest income, loan quality problems may erode the gross interest income of banks. Using stochastic frontier analysis, we estimate the interest income of a hypothetical profit-maximizing Chinese bank with no credit quality problems. Taking the deviation of actual interest income from the calculated efficient income, we then attempt to reveal the amount of hidden NPLs in Chinese banks. Our results uncover a substantial weakening in the quality of Chinese bank loan portfolios in 2016.

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