Liquidity of Czech and Slovak commercial banks

As liquidity problems of some banks during global financial crisis re-emphasized, liquidity is very important for functioning of financial markets and the banking sector. The aim of this paper is therefore to evaluate comprehensively the liquidity positions of Czech and Slovak commercial banks via different liquidity ratios in the period of 2001–2010 and to find out whether the strategy for liquidity management differs by the size of the bank. We used unconsolidated balance sheet data over the period from 2001 to 2010 which were obtained from annual reports of Czech and Slovak banks. The sample includes significant part of Czech and Slovak banking sector (not only by the number of banks, but also by their share on total banking assets). We have calculated five different liquidity ratios for each bank in the sample. The results showed that liquidity of Czech banks has declined during last ten years. On the contrary, liquidity of Slovak banks fluctuated only slightly during the period 2001–2008. Bank liquidity has fallen due to the financial crisis in both countries; the impact is worse for Slovak banks. Both Czech and Slovak banks have become less liquid also as a result of increase in lending activity. Czech and Slovak banks have the same strategies how to insure against liquidity crises: big banks rely on the interbank market or on a liquidity assistance of the Lender of Last Resort, small and medium sized banks hold buffer of liquid assets.

Download Full-text

The Impact of the Global Financial Crisis on Profitability of the Banking Industry: A Comparative Analysis

Economies ◽

10.3390/economies6040066 ◽

2018 ◽

Vol 6 (4) ◽

pp. 66 ◽

Cited By ~ 2

Author(s):

G. Erfani ◽

Bijan Vasigh

Keyword(s):

Financial Crisis ◽

Commercial Banks ◽

Banking Sector ◽

Global Financial Crisis ◽

Seemingly Unrelated Regression ◽

Islamic Banks ◽

Islamic Tradition ◽

Score Model ◽

The Global Financial Crisis ◽

The Impact

In this paper, the effects of the recent global financial crisis on efficiency and profitability of financial institutions were analyzed. In a comparative study, the impacts of the global financial crisis on the performance of Islamic and commercial banks were examined. The fundamental difference between Islamic and conventional banking is that Islamic banking is founded upon the ethical principles of Islamic tradition and law (Sharia). By utilizing a sample of eight Islamic banks and eleven commercial banks, the impact of the global financial crisis on efficiency and profitability of the banking sector was evaluated. This study covered the period from 2006 to 2013. The results of this research were obtained from the Altman Z-score model, ratio analysis, the data envelopment analysis (DEA) method, and the seemingly unrelated regression (SUR) model. The results show that during the study period, Islamic banks (IBs) managed to maintain their efficiency while most commercial banks (CBs) suffered a loss in their efficiency. Furthermore, this study found that the financial crisis did not have a significant impact on the profitability of Islamic banks.

Download Full-text

Global Financial Crisis and Banking Sector Efficiency: The Indian Perspective

Journal of Business Management and Information Systems ◽

10.48001/jbmis.2014.0101008 ◽

2014 ◽

Vol 1 (1) ◽

pp. 90-109

Author(s):

Seema Garg

Keyword(s):

Data Envelopment Analysis ◽

Financial Crisis ◽

Commercial Banks ◽

Banking Sector ◽

Global Financial Crisis ◽

Data Envelopment ◽

Crisis Period ◽

International Financial Crisis ◽

Indian Banks ◽

The Impact

Banks play a crucial role in developing and least developed economies by facilitating in trade finance. Banks established an important linkage in international trade by guaranteeing international payments and thereby reducing the risk of trade transactions. The Banks in India has witnessed a significant growth, specialization and diversification since the initiation of financial sector reforms in 1991and further slowdown in the economy as a result of global financial crisis in 2008-2009. This study examines the performance of Indian banks using data envelopment analysis. Though, there are large number of literature have been published on banking efficiency, This is an attempt to investigate the impact of global financial crisis on performance of Indian banking sector. The sole objective of this study is to exhibit, utilizing empirical data, the quantum to which the global financial crisis had an impact on the performance of the Indian banking industry. This study gives a comparative empirical analysis of the technical efficiency of Indian commercial banks during pre and post crisis period covering 2005-2012 using non parametric technique i.e. Data Envelopment Analysis (DEA). This period is consisting of pre and post global crisis period which is characterized by far reaching experience of crisis period (2008-2009) and its impact on the efficiency of the Indian banking sector. Overall, the results reveal that the effect of international financial crisis on the Indian banks has not been significant. Instead, the analysis reveals there is a statistically insignificant improvement in the efficiency of Indian banks’ following international financial crisis. Furthermore, the paper shows that the commercial banks have a high degree of resilience and stability.

Download Full-text

Liquidity Risk Sensitivity of Czech Commercial Banks

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis ◽

10.11118/actaun201462020427 ◽

2014 ◽

Vol 62 (2) ◽

pp. 427-436

Author(s):

Pavla Vodová

Keyword(s):

Commercial Banks ◽

Banking Sector ◽

Balance Sheet ◽

Liquidity Risk ◽

Negative Influence ◽

Annual Reports ◽

Risk Sensitivity ◽

Interbank Market ◽

Liquidity Shocks ◽

The Impact

The recent financial crisis has shown that a liquidity risk plays an important role in the current developed financial system. One of the efficient tools of liquidity risk management is stress testing which can show banks their potential vulnerability to liquidity shocks. The aim of this paper is therefore to measure the liquidity risk sensitivity of Czech commercial banks and to find out the most severe scenario and the most vulnerable bank. Our sample included significant part of the Czech banking sector; we used unconsolidated balance sheet data over the period from 2000 to 2011 which were obtained from annual reports of Czech banks. We have evaluated liquidity risk of each bank in the sample via six different liquidity ratios. Then we stressed these baseline values in three stress scenarios: run on a bank (simulated by a 20% withdrawal of deposits), confidence crisis on the interbank market (simulated by a withdrawal of 20% of interbank deposits) and use of committed loans by counterparties (simulated by a 5% increase of loans provided to nonbank clients). We measured the impact of all scenarios by relative change of liquidity ratios. The impact of modelled liquidity shocks differs among scenarios. The most serious liquidity problems would be caused by the first scenario – run on a bank. The negative influence of third scenario (use of committed loans) is less severe. The confidence crisis on the interbank market would not affect bank liquidity at all. The results also show that the severity of the impact of all scenarios worsens in periods of financial distress. We have also found that large and medium sized banks are most vulnerable to liquidity shocks, mainly to massive deposit withdrawals.

Download Full-text

Restructuring Measurements Impact on Bank Risk After the Global Financial Crisis — Empirical Evidence from Vietnam

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091521500193 ◽

2021 ◽

pp. 2150019

Author(s):

Tu T. T. Tran ◽

Yen Thi Nguyen

Keyword(s):

Financial Crisis ◽

Commercial Banks ◽

Global Financial Crisis ◽

Banking System ◽

The State ◽

Bank Risk ◽

The Government ◽

The Global Financial Crisis ◽

Bank System ◽

The Impact

Project 254 signed in November 2011 which is relating to “Restructuring the system of credit institutions in the period of 2011–2015” has been considered as a milestone in marking the Vietnamese government to prevent the influence of the financial crisis of 2008. This paper identifies hypotheses evaluating the impact of restructuring measurements on the risk of the Vietnamese’s commercial banks in 10 years, starting from 2008. Using the OLS regression method for analysis by running Eviews and ANOVA test in SPSS with a unique database of 216 observations of 31 commercial banks in Vietnam, it was found that: (i) The bail-out activities of the State Bank of Vietnam in 2015 does not influence on bank risk, (ii) The mergers and acquisitions (M&A) do not support the bank to reduce risk, it increases the risk for acquiring banks, (iii) The global crisis 2008 exerts dire consequence on the bank system in Vietnam, (iv) There is the difference of risk among the groups of the bank experiencing a different number of years of operation. Basing on this result, the paper also makes recommendations to the Government, The State Bank of Vietnam and the commercial banks for effective risk management toward the development of the Vietnamese banking system.

Download Full-text

Determinants of corporate social responsibility disclosures of UAE national banks: a multi-perspective approach

Social Responsibility Journal ◽

10.1108/srj-09-2017-0191 ◽

2019 ◽

Vol 16 (5) ◽

pp. 631-654

Author(s):

Elie Menassa ◽

Nancy Dagher

Keyword(s):

Financial Crisis ◽

Financial Performance ◽

Banking Sector ◽

Global Financial Crisis ◽

Arab World ◽

Annual Reports ◽

Content Type ◽

Explanatory Factors ◽

The World ◽

Corporate Social

PurposeThis paper aims to examine the determinants and extent of corporate social disclosure (CSD) by UAE national banks and to investigate the changes in CSD before, during and after the latest financial crisis.Design/methodology/approachDeductive in nature, this paper uses content analysis of annual reports of 16 UAE banks over a period of six years (2006-2011) to test eight hypotheses related to size, financial performance and other variables as potential explanatory variables of the CSD extent over different periods.FindingsThe findings show that human resources and community disclosures exhibited the highest extent of CSD over the six years. Moreover, the size and financial performance variables appear to be significant explanatory factors for the extent of CSD. The findings also indicate a strong variation in disclosure between banks with international presence and those with no such presence, while there is no significant disclosure variation between Islamic and conventional banks or during the different periods under investigation (pre, during and post recent financial crisis).Research limitations/implicationsStudies allowing a greater understanding of how banks with extensive governmental ownership define and disclose CSR in this particular region of the world are scarce and exploratory in nature. Consequently, the structure of national UAE banks provides a unique opportunity to understand the CSR mechanisms and disclosure of similar institutions in the world (particularly in the Arab world). This presents an interesting direction for further research.Practical implicationsThese findings could assist UAE bankers and policymakers in integrating CSD in their corporate strategies and help the local and international business communities in understanding the characteristics of CSD in the UAE.Originality/valueComprehensive in scope, this paper provides a complete assessment of the potential explanatory proxies of CSD by UAE local banks before, during and after the recent global financial crisis. Comparable studies of the UAE banking sector have mainly focused on particular bank types (i.e. Islamic or conventional) and did not consider the effect of the recent adverse financial climate.

Download Full-text

FINANCIAL PERFORMANCE OF ISLAMIC BANKING AFTER THE GLOBAL FINANCIAL CRISIS: A COMPARISON BETWEEN ISLAMIC COMMERCIAL BANKS AND ISLAMIC BUSINESS UNIT BANKS IN INDONESIA

Ar-Raniry International Journal of Islamic Studies ◽

10.20859/jar.v4i1.130 ◽

2017 ◽

Vol 4 (1) ◽

pp. 149

Author(s):

Laili Rahmi

Keyword(s):

Financial Crisis ◽

Financial Performance ◽

Risk Ratio ◽

Commercial Banks ◽

Global Financial Crisis ◽

Islamic Banking ◽

Business Unit ◽

Significant Difference ◽

The Global Financial Crisis ◽

The Impact

<p>The global financial crisis has affected some industries or non-industries around the world. It has also impacted to Islamic banking in Indonesia, especially after 2007-2008. It has been recorded the Islamic banking industry in Indonesia shows a speedy recovery from the impact of the global financial crisis. Thus, this study aims to evaluate and examine the differences of Islamic banking’s financial performance after the global financial crisis in Indonesia. The financial performances in this study are profitability ratio (Return on Asset (ROA) and Return on Equity (ROE)), liquidity ratio (Financing to Deposit Ratio (FDR) and Current Asset Ratio (CAR)) and solvency risk ratio (Equity Multiplier (EM) and Debt to Equity Ratio (DER)). The samples in this study are the six Islamic banks from Islamic Commercial Banks (Bank Usaha Sharia (BUS)) and Islamic Business Unit Banks (Unit Usaha Sharia (UUS)) in Indonesia. Based on the results shows by the descriptive statistic, UUS is more effective in using their assets to generate income compared to BUS, but BUS is greater to manage their financing and more liquid than UUS whose has higher risk than BUS during 2009-2013. Independent sample t-test shows that there is significant difference in terms of profitability, liquidity and solvency risk ratio between BUS and UUS Indonesia during 2009-2013</p>

Download Full-text

The Impact of the Global Financial Crisis on China's Banking Sector

The Copenhagen Journal of Asian Studies ◽

10.22439/cjas.v35i1.5397 ◽

2017 ◽

Vol 35 (1) ◽

pp. 5-30

Author(s):

Michiel Haasbroek ◽

Jörn-Carsten Gottwald

Keyword(s):

Financial Crisis ◽

Banking Sector ◽

Global Financial Crisis ◽

Financial Sector ◽

Chinese Economy ◽

Initial Reaction ◽

Top Down ◽

Bottom Up ◽

The Global Financial Crisis ◽

The Impact

The banking sector had long been left at the fringes of China's reform policies. Major initiatives of the 1990 and early 2000s helped to balance the need for modernization and internationalization with the objective of preserving political control. When the Global Financial Crisis (GFC) erupted in 2007, it hit the Chinese economy but predominantly in its export sector and much less in its financial sector. Yet when exports collapsed and factories closed in the winter of 2008/2009, the Chinese leadership implemented an ambitious stimulus program and used its leverage over the financial sector to re-start economic growth. These factors – GFC and domestic stimulus – created a series of intended and unintended outcomes. Financial reform in China entered a new stage signalling a profound change in China's banking sector. These changes follow two sometimes contradictive, sometimes mutually reinforcing reform dynamics of top-down policies and bottom-up innovation. In this article we follow an institutional approach and discuss the intensified participation of China's big banks in the Go Out strategy, followed by a shift in the pattern of lending. One factor in this change is the rise of shadow banking and particularly an explosive growth in internet-based financial services. Thus, while the initial reaction to the GFC re-emphasized direct, top-down state involvement in the banking sector, the outcomes of the GFC, China's policies and business innovations have facilitated profound bottom-up changes.

Download Full-text