Brazil's banks boost profits despite fall in lending

2016 ◽  
Keyword(s):  
Risk Management ◽  
Bank Lending ◽  
Foreign Banks ◽  
Loan Loss ◽  
Current Crisis ◽  
Content Type ◽  
Loan Demand ◽  
Positive Elements ◽  
Deep Recession

Significance Brazil's deep recession is not reflected in the healthy results announced by its major banks, which represent one of the few positive elements of a beleaguered economy. Good levels of capital, liquidity and loan loss reserves as well as strong earnings capacity and savvy risk management should ensure that Brazil's largest lenders remain financially healthy throughout the current crisis. Impacts Bank lending will become a less important engine of growth, with weak loan demand hindering recovery. A likely rise in non-performing loans this year will probably be modest. Foreign banks entering the market may find the acquisition of smaller entities a better bet than seeking a banking licence.

scholarly journals Risk governance: Experience of Islamic banks

2015 ◽  
Vol 5 (2) ◽  
pp. 31-40
Author(s):  
Mat Rahim Siti Rohaya ◽  
Fauziah Mahat
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Structural Equation ◽  
Committee Member ◽  
Bank Lending ◽  
Capital Adequacy ◽  
Risk Governance ◽  
Islamic Banks ◽  
Loan Loss ◽  
Cross Sectional

Risk governance has evolved tremendously in the banking industry. Risk governance recommends the imperative roles of Chief Risk Officer (CRO) to oversee risk. This study explores risk governance influence over the Islamic banks performances. Multivariate analysis techniques measure simultaneously via Structural Equation Modelling (SEM). This study employed cross-sectional sample of 200 Islamic banks across 21 countries for the year 2014. To examine risk governance and Islamic banks performance, the study captures seventeen variables developed from risk management and corporate governance (ROA, ROE, Profit Margin, CRO, Shariah committee member, CEO, board size, remuneration meeting, credit rating, external audit, accounting standard, loan loss provision, capital adequacy ratio, total deposit ratio, GDP, central bank lending rate and inflation). The simulation result reveals, risk governance act as mediating variables towards Islamic banks performance. This study has practical and significance contribution for Islamic banks to understand risk governance, aligning with the fundamental risk management and corporate governance.

scholarly journals Challenges of accountability in Nigeria: the role of deposit money bank

2020 ◽  
Vol 23 (2) ◽  
pp. 477-492 ◽  
Author(s):  
Abiola Ayopo Babajide ◽  
Adedoyin Isola Lawal ◽  
Lanre Olaolu Amodu ◽  
Abiola John Asaleye ◽  
Olabanji Olukayode Ewetan ◽  
...  
Keyword(s):  
Deposit Insurance ◽  
Banking Sector ◽  
Bank Lending ◽  
Annual Reports ◽  
Loan Loss ◽  
Bank Profitability ◽  
Content Type ◽  
Significance Level ◽  
Long Run ◽  
Corruption Index

Purpose The unhealthy drive for deposit in the banking sector has pushed many banks into unethical practices, thereby resulting in high-level corruption cases in the banking sector. The purpose of this study is to investigate the short- and long-run linkages between bank net interest income and deposit liabilities interacted with corruption, to establish the influence of corruption in deposit mobilisation drive of banks in Nigeria. Also, the study analysed the causal relationship between selected bank variables and fraud. Design/methodology/approach The study used quarterly data on selected variables from 1Q 1993 to 4Q 2017 sourced from Nigerian Deposit Insurance Corporation (NDIC) annual reports and Central Bank of Nigeria (CBN) Statistical Bulletin of various issues. Deposit Money Bank various deposit liabilities are interacted with a corruption index and used as the independent variables, while bank earnings serve as the dependent variable. Error Correction Model (ECM) and Engel Granger approach to co-integration technique were used to analyse the data. Findings The findings reveal that various bank deposit liabilities interacted with corruption index has a negative effect on bank profitability in the long run, though only corrupt fixed deposit is statistically significant at the 5 per cent significance level. Bank total asset, total loan and advances and fraud have a significant effect on bank profitability at 1 and 10 per cent significance level. The findings also reveal that banks profit from corrupt fixed deposit and demand deposit in the short run. Social implications Text Originality/value The literature is awash with bank lending corruption and various institutional factors such as competition among banks, credit bureau and information sharing about borrowers, bank supervisory policies, loan loss provisioning, bank ownership structure and regulatory environment and anti-corruption measures. The aspect of deposit mobilisation and corruption has not been well researched in literature; this study, therefore, fills the gap in the literature by examining the extent deposit money banks contributed to corruption in Nigeria through their cutthroat deposit mobilisation drive.

Ecuador banking sector is set for a comeback

2018 ◽  
Keyword(s):  
Private Sector ◽  
Central Bank ◽  
Banking Sector ◽  
Bank Lending ◽  
Foreign Banks ◽  
Economic Recovery ◽  
Content Type ◽  
Loan Growth ◽  
Double Digit

Subject Banking sector prospects. Significance Private sector banks in Ecuador enjoyed strong double-digit loan growth last year -- a reflection of the troubled economy’s gradual emergence from recession. That economic recovery, and the pragmatic willingness of President Lenin Moreno to work with the private sector, is generating optimism regarding the prospects of the country’s banking sector. Impacts Strong bank lending is key for economic recovery, allowing firms to increase investments and consumers to spend more. Taking the E-money system from the central bank shows Moreno’s pragmatism vis-a-vis the private sector. The planned sale of state-owned lender Banco del Pacifico could attract the interest of foreign banks.

Do foreign banks in India respond to global monetary policy shocks? A SVAR analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ameen Omar Shareef ◽  
K.P. Prabheesh
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Monetary Policy Shocks ◽  
Content Type ◽  
Indian Economy ◽  
Policy Shocks ◽  
The Impact

Purpose This paper aims to examine the role of foreign banks in transmitting global monetary policy shocks to India. Further, the authors try to explore the international bank lending channel and analyze the impact of global monetary policy on Indian macroeconomic variables. Design/methodology/approach The authors use a structural break unit root test and structural vector autoregression on monthly data from 1998 to 2018. Findings The study finds that the global monetary policy is significantly determining foreign banks’ lending in India; the evidence of a portfolio re-balancing channel in the process of global monetary policy transmission to the Indian economy; the exchange rate is significantly explaining the foreign bank credit dynamism in India; and evidence of international monetary policy spillover to the Indian economy. Originality/value This is the first attempt to analyze the role of foreign banks in the transmission of global monetary policy shocks to India, where the literature availability is limited. The finding of ineffective domestic monetary policy on foreign bank lending opens the need for an in-depth and diversified analysis of the role of foreign banks in the transmission of domestic monetary policy.

Bank lending and bank relationships in China: guanxi or commercial?

2017 ◽  
Vol 43 (4) ◽  
pp. 425-439 ◽  
Author(s):  
Wei Yin ◽  
Kent Matthews
Keyword(s):  
Transition Economy ◽  
Bank Lending ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Relationship Banking ◽  
Content Type ◽  
Banking Market ◽  
Bank Ownership ◽  
Domestic Banks ◽  
Relationship Of

Purpose China as a main emerging and transition economy has since 2006 opened up its banking market to foreign competition. Thus far, the penetration of foreign banks has been only moderate with around 2 per cent market share of the total banking market, despite the widely held view that foreign banks operate at a higher level of efficiency and that Chinese state-owned banks (SOBs) operate at a lower level of efficiency. The purpose of this paper is to explore the relationship between bank ownership and the lending behaviour and relationship banking that stems from the Chinese tradition of “guanxi”. Design/methodology/approach Based on three bank types the authors construct a model of the choice of bank type and show how that model can be estimated using a multinomial logit. The authors assume that firms choose a bank type as a function of firm characteristics (Berger et al., 2008; Ongena and Sendeniz-Yüncü, 2011), deal terms (Machauer and Weber, 2000; Ziane, 2003), and industry classification (Uchida et al., 2008; Ongena and Sendeniz-Yüncü, 2011). Findings This paper finds the existence of a close banking relationship of a “guanxi” type between SOBs and state-owned enterprises (SOEs). This is shown up in the form of better deal terms for the SOE. In the case of foreign banks the authors find that a foreign bank-foreign owned enterprise relationship exists but this is based on risk quality and no advantages in deal terms, which suggest a more commercial-based relationship. The empirical findings are that transparent and high-quality firms are likely to engage with foreign banks, while state-owned firms are more likely to engage with SOBs. Originality/value In China, few studies have addressed the potentially important role of bank ownership on lending behaviour (e.g. Firth et al., 2008; Berger et al., 2009). The authors extend the analysis by distinguishing not only between foreign and domestic banks, but also between SOBs and other domestic banks. This research seeks to enhance the understanding of bank ownership, lending behaviour and relationship banking.

scholarly journals Bank loan loss provisions, investor protection and the macroeconomy

2018 ◽  
Vol 13 (1) ◽  
pp. 45-65 ◽  
Author(s):  
Peterson K. Ozili
Keyword(s):  
Investor Protection ◽  
Positive Function ◽  
Bank Lending ◽  
Bank Loan ◽  
Loan Loss ◽  
African Region ◽  
African Countries ◽  
Content Type ◽  
Loan Loss Provisions ◽  
Economic Boom

Purpose The purpose of this paper is to investigate the non-discretionary determinants of bank loan loss provisions in Africa after controlling for macroeconomic fluctuation, financial development and investor protection. Design/methodology/approach The author uses static and dynamic regression estimation to test for the determinants of bank loan loss provisions. Findings The author finds that non-performing loans (NPL), loan-to-asset ratio and loan growth are significant non-discretionary drivers of bank provisions in the African region. The author observes that bank provision is a positive function of NPL up to a threshold beyond which bank provisions will no longer increase as NPL increases. Also, bank loan-to-asset ratio is a significant driver of bank provisions when African banks have higher loan-to-asset ratios. The author finds that larger banks in financially developed African countries have fewer loan loss provisions while increase in bank lending leads to fewer bank provisions in countries with strong investor protection. Finally, higher bank lending is associated with higher bank provisions during economic boom. Originality/value This study is the first to assess the determinants of non-discretionary bank provisions in Africa as part of micro-prudential surveillance of banks in the African region.

Brazil's bank lending will pick up after sharp decline

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Bank Lending ◽  
Single Digit ◽  
Content Type ◽  
Fiscal Constraints ◽  
Loan Demand ◽  
Low Interest Rates ◽  
Will Force ◽  
Loan Growth

Subject Outlook for the banking sector. Significance Following a deep two-year recession that started in 2015, Brazil’s financial system will see loan growth returning to positive territory. This will be slow and gradual, with lending set to expand at single-digit rates during the next few years. Banks saw improving profitability in 2017 due to a reduction in expenses related to bad loans, but this will come under pressure because of record-low interest rates. Impacts Rising bank lending will support economic recovery but will not be the same engine of GDP growth as in past years. Large state-owned banks will be somewhat less dominant due to capital and fiscal constraints. Lower interest rates and weak loan demand will force banks to focus on increased efficiency and fee-generating products and services.

The influence of earnings management and bank structure on bank performance

2017 ◽  
Vol 43 (7) ◽  
pp. 761-773 ◽  
Author(s):  
Nacasius U. Ujah ◽  
Jorge Brusa ◽  
Collins E. Okafor
Keyword(s):  
Earnings Management ◽  
Emerging Market ◽  
Negative Influence ◽  
Foreign Banks ◽  
Monopoly Power ◽  
Bank Performance ◽  
Loan Loss ◽  
Content Type ◽  
Bank Structure ◽  
The Usa

Purpose The purpose of this paper is to examine the influence of bank structure and earnings management on bank performance in international markets. Specifically, the authors empirically examine non-foreign banks in the following emerging countries: Brazil, China, India, Mexico, Nigeria, Russia, and South Africa. Design/methodology/approach A review of loan loss portfolio and bank’s power structure is examined to formulate testable conjectures. The authors used data collected from Bankscope for the aforementioned countries. The data range is from 1997 to 2009. Findings The results suggest that: first, bank market structure and earnings management have a significantly negative influence on bank performance. Second, the negative influence is more pronounced in banks with higher level of concentration and earnings management. Practical implications The evidence suggest that banks with monopoly power have a greater incentive to establish lending relationships, and monopoly enhancing regulation in the financial sector at the time of the Civil War contributed to industrialization in the USA. The evidence in the emerging market suggest that monopoly power (bank structure) and propensity to manage earnings leads to lower bank performance. As such, helping bankers in understanding the effect of their bank structure in relation to their performance. Originality/value To the author’s knowledge, this is the first study that explores the determinants of managed earnings and bank structure on bank performance in emerging markets.

Foreign Banks in the Crisis

2017 ◽  
Author(s):  
Rachel A. Epstein
Keyword(s):  
Financial Crisis ◽  
Central Europe ◽  
Bank Lending ◽  
Foreign Ownership ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Market Model ◽  
Unexpected Finding ◽  
East Central Europe ◽  
East Central

One reason governments have protected their banks from foreign ownership is that they feared foreign-owned banks would “cut and run”—i.e. abandon their host markets—in a financial crisis. An unexpected finding of this chapter, however, is that while foreign banks’ commitments to host markets have indeed been fleeting in crises, those commitments were weakest when the relationship between foreign banks and host markets was not characterized by ownership. Thus it was foreign ownership through a “second home market” model and bank subsidiaries during the acute phase of the US financial crisis (2008–9) that saved East Central Europe from economic catastrophe. In Western Europe, meanwhile, where foreign bank ownership levels were low but cross-border lending was significant, bank lending retreated behind national borders. This chapter also rejects the argument that the Vienna Initiative, a voluntary bank rollover agreement, compelled foreign-owned banks to maintain their exposures in East Central Europe.

Information security in the South Australian real estate industry

2014 ◽  
Vol 22 (1) ◽  
pp. 24-41 ◽  
Author(s):  
Deepa Mani ◽  
Kim-Kwang Raymond Choo ◽  
Sameera Mubarak
Keyword(s):  
Risk Management ◽  
Information Security ◽  
Real Estate ◽  
South Australia ◽  
Security Threats ◽  
The South ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Sector

Purpose – Opportunities for malicious cyber activities have expanded with the globalisation and advancements in information and communication technology. Such activities will increasingly affect the security of businesses with online presence and/or connected to the internet. Although the real estate sector is a potential attack vector for and target of malicious cyber activities, it is an understudied industry. This paper aims to contribute to a better understanding of the information security threats, awareness, and risk management standards currently employed by the real estate sector in South Australia. Design/methodology/approach – The current study comprises both quantitative and qualitative methodologies, which include 20 survey questionnaires and 20 face-to-face interviews conducted in South Australia. Findings – There is a lack of understanding about the true magnitude of malicious cyber activities and its impact on the real estate sector, as illustrated in the findings of 40 real estate organisations in South Australia. The findings and the escalating complexities of the online environment underscore the need for regular ongoing training programs for basic online security (including new cybercrime trends) and the promotion of a culture of information security (e.g. when using smart mobile devices to store and access sensitive data) among staff. Such initiatives will enable staff employed in the (South Australian) real estate sector to maintain the current knowledge of the latest cybercrime activities and the best cyber security protection measures available. Originality/value – This is the first academic study focusing on the real estate organisations in South Australia. The findings will contribute to the evidence on the information security threats faced by the sector as well as in develop sector-specific information security risk management guidelines.

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