scholarly journals Determinants of the performance of Moroccan banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdelkader Derbali
Keyword(s):  
Banking System ◽  
Bottom Line ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Economy Of Scale ◽  
Effect Model ◽  
Bank Managers ◽  
Banking Networks ◽  
The Impact

PurposeThe economic and financial literature dealing with the subject of bank profitability has often been based in the measurement of banking results on three main indicators: ROA, ROE and MIN. This article aims to determine and analyze the different determinants that influence bank profitability and to identify the impact of these determinants on the profitability of Moroccan banks.Design/methodology/approachFor this purpose, a fixed individual effect model was adopted for the case of six Moroccan banks during the period of study from 1997 to 2018. The authors carried out their estimates at three levels according to three categories of profitability factors: bank factors, factors of the banking system and macroeconomic factors.FindingsThe empirical findings show that Moroccan banks react on their size to boost their performance, which further explains the continued expansion of Moroccan banking networks. The authors confirm that Moroccan banks have not yet reached a level of size that will be detrimental to their performance. Therefore, the authors can conclude that the big Moroccan banks do not follow the concept of economy of scale. The effects of the variation in the level of economic growth as well as the evolution of the level of inflation on the performance of Moroccan banks are not significant.Originality/valueThe authors’ findings and results have some important originality and value. Primarily, these results would consist of better helping the State, bankers, and bank managers to better understand the various determinants of bank profitability. The results may also help to better examine the effect of each factor, whether internal or external, on banks' bottom line.

scholarly journals The Impact of Specific Banking, Industrial and Macroeconomic Factors on Bank Profitability: Evidence from the Albanian Banking System

2019 ◽  
Vol 9 (2) ◽  
pp. 182
Author(s):  
Gazmend Nure
Keyword(s):  
Banking System ◽  
Short Term ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Return On Equity ◽  
Specific Factors ◽  
The Impact ◽  
Research Studies ◽  
Bank Profits

This research studies the factors that affect the profitability of the banking system in Albania during the period 2012-2017.The specific factors taken in the study are divided into two groups: the specific banking factors (internal), and the macroeconomic factors. The dependent variable used in the study, to measure Bank Profits, is Return on Equity (ROE). The empirical findings show that, when ROE is used as a dependent variable, all bank specific variables are negatively and significantly related to profitability. That being said, there is the exception of the liquidity factor (Liquid assets over short term liabilities) and bank size which has a positive.

Nonperforming loans and bank profitability: evidence from an emerging market

2016 ◽  
Vol 7 (4) ◽  
pp. 462-481 ◽  
Author(s):  
Esther Laryea ◽  
Matthew Ntow-Gyamfi ◽  
Angela Azumah Alu
Keyword(s):  
Banking Sector ◽  
Emerging Market ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Policy Makers ◽  
Content Type ◽  
Nonperforming Loans ◽  
Panel Model ◽  
Macroeconomic Determinants ◽  
The Impact

Purpose The purpose of this paper is to investigate the bank-specific and macroeconomic determinants of nonperforming loans (NPLs) as well as the impact of NPLs on bank profitability. Design/methodology/approach Using a sample of 22 Ghanaian banks over the period 2005-2010, the study employs a fixed effect panel model in estimating three different empirical models. Findings The study finds new evidence of bank-specific factors as well as macroeconomic factors determining NPLs. Inflation and industry concentration are not significant in determining NPLs, although both are positively related to NPLs. Practical implications The findings of this study have important implications for policy makers and bank managers. Originality/value The paper offers significant value in shaping and improving the banking sector of emerging markets.

The interrelationship between net interest margin and non-interest income: evidence from Vietnam

2017 ◽  
Vol 13 (5) ◽  
pp. 521-540 ◽  
Author(s):  
Tu DQ Le
Keyword(s):  
Negative Impact ◽  
Rank Order ◽  
Banking System ◽  
Policy Makers ◽  
Content Type ◽  
Interest Income ◽  
Net Interest Margin ◽  
Bank Managers ◽  
The Impact ◽  
Interest Margin

Purpose The purpose of this paper is to investigate the interrelationship between non-interest income (NII) and net interest margin (NIM) in the Vietnamese banking system between 2006 and 2015. Thereafter, the impact of NII on risk-adjusted returns is also examined. Design/methodology/approach Various analysis techniques are used to achieve the research objectives. Findings The findings show a negative two-way link between NII and NIM, thus supporting the subsidisation hypothesis. Furthermore, NII is found to have a negative impact on risk-adjusted returns. When observing this relationship in sub-samples, the findings indicate that the negative impact of NII on risk-adjusted returns still holds in the first subsample (2006-2011). The coefficient of NII becomes positive but not significant for the subsequent period (2012-2015). In addition, the Spearman rank-order correlations of returns on assets and NII for both sub-samples are negative. Together, the author concludes that there are no diversification benefits in the Vietnamese banking system. Practical implications The evidence suggests a trade-off between non-interest activities and traditional lending ones. In addition, the findings demonstrate that the Vietnamese banks may use NIIs to expand leverage and herd by coordinating NII strategy during the economic downturns. Thus, the banking system may be exposed to a greater risk. The research has implications for bank supervisors, policy-makers and bank managers. Originality/value This study is the first attempt to investigate the interrelationships between net NII and NIM in the Vietnamese banking system.

Shareholder risk-taking incentives in the presence of contingent capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Fatouh ◽  
Ayowande A. McCunn
Keyword(s):  
Risk Taking ◽  
Banking System ◽  
Capital Requirements ◽  
Content Type ◽  
Basic Model ◽  
Conversion Rates ◽  
A Minor ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to present a model of shareholders’ willingness to exert effort to reduce the likelihood of bank distress and the implications of the presence of contingent convertible (CoCo) bonds in the liabilities structure of a bank. Design/methodology/approach This study presents a basic model about the moral hazard surrounding shareholders willingness to exert effort that increases the likelihood of a bank’s success. This study uses a one-shot game and so do not capture the effects of repeated interactions. Findings Consistent with the existing literature, this study shows that the direction of the wealth transfer at the conversion of CoCo bonds determines their impact on shareholder risk-taking incentives. This study also finds that “anytime” CoCos (CoCo bonds trigger-able anytime at the discretion of managers) have a minor advantage over regular CoCo bonds, and that quality of capital requirements can reduce the risk-taking incentives of shareholders. Practical implications This study argues that shareholders can also use manager-specific CoCo bonds to reduce the riskiness of the bank activities. The issuance of such bonds can increase the resilience of individual banks and the whole banking system. Regulators can use restrictions on conversion rates and/or requirements on the quality of capital to address the impact of CoCo bonds issuance on risk-taking incentives. Originality/value To model the risk-taking incentives, authors generally modify the asset processes to introduce components that reflect asymmetric information between CoCo holders and shareholders and/or managers. This paper follows a simpler method similar to that of Holmström and Tirole (1998).

Disintermediation of banks in a developing economy

2019 ◽  
Vol 45 (2) ◽  
pp. 222-243 ◽  
Author(s):  
Tahseen Mohsan Khan ◽  
Syed Kumail Abbas Rizvi ◽  
Ramla Sadiq
Keyword(s):  
Design Methodology ◽  
Structural Changes ◽  
Banking System ◽  
Causality Test ◽  
Correction Model ◽  
Content Type ◽  
Balance Sheets ◽  
Panel Regressions ◽  
The Impact ◽  
Major Hypothesis

Purpose The purpose of this paper is to investigate how Pakistani banks manage their portfolios (lending vs investment) when the economic indicators are not supportive. This study investigates three aspects of the banking system in Pakistan – prevalence of disintermediation, post-crisis profitability orientation and depositor protection by financial system in unfavorable conditions. Design/methodology/approach This study is limited to identifying the key economic and financial drivers behind disintermediation and its subsequent impact on banks’ profitability and depositors’ protection. GLS panel regressions and Engle–Granger causality test as specified by the error correction model have been used to test the major hypothesis of this study. Findings This study shows that small banks have been shifting major part of their portfolios toward risk-free investments to be able to maintain their profitability more efficiently and effectively, like large banks. The study also observes that significant pairing causality exists between gross credit loans and investments confirming disintermediation hypothesis for all types of banks except Islamic or Sharia compliant banks, whereas for significant pairing causality, the results are mixed for remaining variables among gross credit loans as a proportion of assets and economic variables that include GDP growth, unemployment, KSE-100 and SBP policy rate. It is also confirmed by the results that disintermediation improves banks profitability and depositor protection, thus providing a good rationale and justification to banks for opting it. Originality/value The study focuses on the impact of structural changes in portfolios only of commercial banks’ revenue-generating assets not including other financial institutions as a part of banking system. Furthermore, data are extracted from balance sheets and is the sole property of corresponding author.

The impact of transformational leadership on employees’ acceptance to change

2018 ◽  
Vol 48 (4) ◽  
pp. 559-578 ◽  
Author(s):  
Ritu Tayal ◽  
Rajesh Kumar Upadhya ◽  
Mohit Yadav ◽  
Santosh Rangnekar ◽  
Reena Singh
Keyword(s):  
Transformational Leadership ◽  
Leadership Style ◽  
Positive Association ◽  
Mediating Effects ◽  
Content Type ◽  
Bank Managers ◽  
Innovative Behaviour ◽  
Service Oriented ◽  
Employee Acceptance ◽  
The Impact

Purpose The purpose of this study is to empirically examine the association between transformational leadership and employee acceptance to change while establishing the mediating effects of innovative behaviour and the moderating effect of the use of information technology (IT) on this association. Design/methodology/approach In total, 378 employees of ten banks from Uttarakhand, India, participated in a questionnaire-based survey. The proposed hypotheses and the proposed conceptual model were tested using macro process (Hayes, 2013). Findings The results indicated that there exists a positive association between transformational leadership and employee acceptance to change. Furthermore, it was found that this association was mediated by employee innovative behaviour and moderated by the use of IT. Practical implications The findings of this study will help managers to comprehend the significance of the innovative behaviour of employees in moulding their acceptance towards change. This paper should encourage bank managers to perceive the significance of the working practice and the infusion of IT. Furthermore, this study accentuates the significance of an effective leadership style, i.e. transformational leadership, as an essential phenomenon to positively impinge on employee acceptance to change in a service-oriented industry, namely banking. Originality/value The present study enriches the extant research on transformational leadership and employee acceptance to change by demonstrating the use of IT and innovative behaviour as vital and the important factors that influence the level of persuasion that transformational leadership has on employee acceptance to change.

scholarly journals Does Banking Management Affect Credit Risk? Evidence from the Indian Banking System

2018 ◽  
Vol 6 (3) ◽  
pp. 67 ◽  
Author(s):  
Laxmi Koju ◽  
Ram Koju ◽  
Shouyang Wang
Keyword(s):  
Credit Risk ◽  
Default Risk ◽  
Banking System ◽  
Capital Requirements ◽  
Operating Efficiency ◽  
Investment Strategies ◽  
Empirical Results ◽  
Bank Managers ◽  
Credit Standards ◽  
The Impact

This study investigated the impact of banking management on credit risk using a sample of Indian commercial banks. The study employed dynamic panel estimations to evaluate the link between banking management variables and credit risk. The empirical results show that an increase in loan portion over total assets does not necessarily increase problem loans. The findings suggest that high capital requirements and large bank size do not reduce default risk, whereas high profitability and strong income diversification policies lower the likelihood of default risk. The overall empirical results supported the “operating efficiency”, “diversification” and “too big to fail” hypotheses, confirming that credit quality in the banking industry is mainly driven by profitability, banking supervision, high credit standards and strong investment strategies. The findings are relevant to bank managers, investors and bank regulators, in formulating effective credit policies and investment strategies.

scholarly journals Complexity and the triple bottom line: an information-processing perspective

2017 ◽  
Vol 37 (9) ◽  
pp. 1142-1163 ◽  
Author(s):  
Frank Wiengarten ◽  
Muhammad Usman Ahmed ◽  
Annachiara Longoni ◽  
Mark Pagell ◽  
Brian Fynes
Keyword(s):  
Information Processing ◽  
Financial Performance ◽  
Structural Equation ◽  
Negative Impact ◽  
Triple Bottom Line ◽  
Structural Equations ◽  
Equation Modeling ◽  
Bottom Line ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to empirically investigate the impact of complexity on the triple bottom line by applying information-processing theory. Specifically, the paper assesses the impact of internal manufacturing complexity on environmental, social, and financial performance. Furthermore, the paper assesses the moderating role of connectivity and shared schema in reducing the potential negative impact of complexity on performance. Design/methodology/approach Multi-country survey data collected through the Global Manufacturing Research Group were utilized to test the hypotheses. The authors used structural equation modeling to test the measurement and initial structural model. Furthermore, to test the proposed moderating hypotheses, the authors applied the latent moderated structural equations approach. Findings The results indicate that while complexity has a negative impact on environmental and social performance, it does not significantly affect financial performance. Furthermore, this negative impact can be reduced, to some extent, through connectivity; however, shared schema does not significantly impact on the complexity-performance relationship. Originality/value This study presents a comprehensive analysis of the impact of complexity on sustainability. Furthermore, it provides managerial applications as it proposes specific tools to deal with the potential negative influences of complexity.

Empirical evaluation of structure-conduct-performance paradigm as applied to the Iranian Islamic banking system

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahdi Ghaemi Asl ◽  
Muhammad Mahdi Rashidi ◽  
Alireza Ghorbani
Keyword(s):  
Market Structure ◽  
Market Share ◽  
Balance Sheet ◽  
Empirical Evaluation ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Simple Regression Model ◽  
The Impact

Purpose This paper aims to investigate the impact of market structure and market share on the performance of the Islamic banks operating in the Iranian banking system based on the structure-conduct-performance (SCP) paradigm. Design/methodology/approach The Iranian Islamic banking system’s market structure is evaluated by using the econometrics method to test the validity of the traditional SCP paradigm. For this purpose, the authors estimate a simple regression model that is consisted of several independent variables, such as the market share, bank size, real gross domestic product, liquidity and Herfindahl-Hirschman index as a proxy variable for concentration and one dependent variable, namely, the profit as a proxy for performance. The panel data includes a data sample of 22 Islamic banks operating from 2006 to 2019. Data are extracted from the balance sheet of Islamic banks and the time-series database of the Central Bank of Iran and World Bank. Findings The study’s findings indicate that both concentration and market share have a positive impact on the performance of banks in the Iranian Islamic banking system. This result is contradicted with both traditional SCP and efficient structure hypotheses; however, it confirms the existence of oligopoly or cartel in the Iranian Islamic banking system that few banks try to gain the highest share of profit and maintain their market share by colluding with each other. This result is in contradiction with other research studies about the market structure in the Iranian banking system that claimed that banks in Iran operate under monopolistic competition. In addition, it shows that the privatization of some banks in Iran does not improve and help competition in the Iranian banking system. Originality/value This paper is a pioneer empirical study analyzing the market structure, concentration and collusion based on the SCP paradigm in Iranian Islamic banking. The results of the study support the existence of collusive behavior among the Islamic bank in Iran that is not aligned with Sharia. This study clearly shows the difference between ideal Islamic banking and Islamic banking in practice in Islamic countries. This clearly indicates that only prohibiting some operations like receiving interest, gambling and bearing excessive risk is not enough. In fact, the Islamic banking system should be based on the Sharia rule in all aspects and much more modification and study have to be done to achieve an appropriate Islamic banking system. These possible modifications to overcome the issues of cartel-like market structure and collusive behavior in the Iranian Islamic banking system include making the Iranian banking system more transparent, letting foreign banks enter the Iranian banking system and minimizing the government intervention in the Iranian banking system.

Farmland transfer and agricultural economic growth nexus in China: agricultural TFP intermediary effect perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuan-pei Kuang ◽  
Jia-li Yang ◽  
Meseret-Chanie Abate
Keyword(s):  
Economic Growth ◽  
Agricultural Economic ◽  
Test Model ◽  
Promoting Effect ◽  
Content Type ◽  
Effect Model ◽  
Intermediary Role ◽  
Multidimensional Effects ◽  
The Impact

PurposeThe multidimensional effects of farmland transfer in China have been profoundly unstudied. The purpose of this paper is to provide insights on the effects of the intermediary role of agricultural total factor productivity (TFP) of farmland transfer on agricultural economic growth in China.Design/methodology/approachBased on the agricultural data of 30 provinces in China over the period 2005–2018, this paper uses the intermediary effect model to test the relationship between farmland transfer, agricultural TFP and agricultural economic growth. This paper employed an intermediary effect test model to investigate the intermediary role of agricultural TFP in the influence of farmland transfer on agricultural economic growth.FindingsThe findings indicated that farmland transfer has a significant effect on promoting agricultural economic growth. There is a significant “inverted U-shaped” relationship between farmland transfer and agricultural TFP. The sample value of 84.3% of farmland transfers in China is still within the TFP promoting effect range. In addition, farmland transfer has an indirect impact on agricultural economic growth through the channel of agricultural TFP. Agricultural TFP plays a significant intermediary role, but the effect is relatively lowOriginality/valueThis paper is the first to provide fundamental evidence on the impact of farmland transfers on agricultural economic growth in China, driven by agricultural TFP as an intermediary factor. Agricultural TFP can reduce the involution effect of farmland transfer and promote an indirect effect on agricultural economic growth.

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