The impact of credit and liquidity risk on bank financial performance: the case of Indonesian Conventional Bank with total asset above 10 trillion Rupiah

This paper aims to analyze the impact of liquidity risk management on the financial performance of selected conventional banks in Saudi Arabia for the period of 2002-2019. Liquidity risk is measured with the loan to deposit ratio (LTD) and cash to deposit ratio (CTD). Financial performance is measured by the Return on Equity (ROE). Equity to total asset ratio (ETA) is used as the control variable. The study uses the panel data method (Pool, Fixed-effects and Random-effects) for testing the study hypothesis. The results show that liquidity risk has a significant negative impact on the financial performance measured by Saudi Arabian banks.

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The The Impact of Liquidity, Credit, and Financial Leverage Risks on Financial Performance of Islamic Banks: A Case of Sudanese Banking Sector

Risk and Financial Management ◽

10.30560/rfm.v2n2p59 ◽

2020 ◽

Vol 2 (2) ◽

pp. p59

Author(s):

Ahmed Nourrein Ahmed Mennawi

Keyword(s):

Credit Risk ◽

Financial Performance ◽

Banking Sector ◽

Negative Impact ◽

Liquidity Risk ◽

Positive Influence ◽

Islamic Banks ◽

Financial Leverage ◽

Loan Financing ◽

The Impact

This study aims to investigate the impact of liquidity, credit, and financial leverage risks on the financial performance of Islam banks in Sudan during the period of 2008 - 2018. Panel dataset of 143 observations from (13) banks has been used in this study. Two models of ROA and NPM have been constructed using robust random effects estimates for testing the study hypotheses. The independent variables consist of liquidity and credit risks plus the financial Leverage ratio. Credit risk that measured by nonperformance of loan (financing) and provision of loan (financing) loss ratios; while the liquidity risk measured by cash to deposits ratio, liquid assets to total assets ratio and total loan (financing) to total deposits ratio. The financial performance of Islamic banks in Sudan measured by the ratios of return on assets and net profit margin. The results reveal that the credit risk and financial leverage have significant and negative impact on the financial performance of Islamic banks in Sudan, whereas the liquidity risk generally found to be insignificant. Despite that, the liquidity risk in term of liquid assets to total assets ratio provides a significant and positive influence on the financial performance of Sudanese banks. Finally, the importance of this study is that it touches the most significant types of risks that Sudanese Islamic banks face during their operational cycles.

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THE IMPACT OF RISK AND REPUTATION ON FINANCIAL PERFORMANCE IN ISLAMIC BANKING: EVIDANCE FROM INDONESIA

Amwaluna: Jurnal Ekonomi dan Keuangan Syariah ◽

10.29313/amwaluna.v5i2.7033 ◽

2021 ◽

Vol 5 (2) ◽

pp. 230-243

Author(s):

Falikhatun Falikhatun ◽

Mutiarafah Mutiarafah

Keyword(s):

Financial Performance ◽

Risk Mitigation ◽

Control Variable ◽

Liquidity Risk ◽

Profit Sharing ◽

Least Square ◽

Financing Risk ◽

Negative Effect ◽

The Impact ◽

Positive Effect

This study aims to examine the impact of risk and reputation on financial performance. More specifically, we use financing risk, liquidity risk, reputation with rewards, and growth in profit-sharing based financing as our variable of interests. We also assign bank size as a control variable. Our data is analyzed using Generalized Least Square (GLS) regression. Islamic Commercial Banks listed in Sharia Banking Statistics (Statistik Perbankan Syariah - SPS) published by OJK in 2015−2019 are selected as our sample. We find that (1) financing risk has a negative effect on financial performance; and (2) both reputation with rewards and bank size have a positive effect on financial performance. However, liquidity risk and growth in profit-sharing based financing do not affect financial performance. Several research implications are the importance of risk mitigation, the importance to maintain the reputation of the Islamic bank’s stakeholders, and creating innovative funding and financing products.

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The Impact of Risk Management Factors on Banks Performance of Pakistan

NICE Research Journal ◽

10.51239/nrjss.v13i4.221 ◽

2020 ◽

Vol 13 (4) ◽

pp. 1-27

Author(s):

Qasim bin Zahid ◽

Muhammad Khalid Sohail ◽

Abdul Raheman ◽

Muzammal Ilyas Sindhu

Keyword(s):

Financial Performance ◽

Risk Mitigation ◽

Liquidity Risk ◽

Descriptive Statistics ◽

Statistical Techniques ◽

Corporate Sector ◽

Negative Effect ◽

Risk Disclosures ◽

The Impact ◽

Financial Outcome

Risks usually affect the overall profitability/financial performance of any corporate sector. Various techniques of risk mitigation are important in dealing with downturns in the Pakistani economy regarding pandemic, unstable political situations in Pakistan, and different time-to-time policies of state banks regulation which consist of BASEL amendments. Data of fifteen banks had been selected for the period 2012-2018 and analyzed by using certain statistical techniques which are descriptive statistics, correlation, anal regression analysis. As from analysis, we found that Credit risk and Liquidity risk has a positive significant effect on the financial performance of the bank, which is measured by ROA, ROE, Tobin’s Q. Further, one of the risk factors which is operational risk diverts from a hypothesis which shows significant negative effect on the financial outcome of Pakistani banks. The results of this study will help the management of banks to find better solutions to enhance performance. Further, the policy implication of this study advises that banks should follow BASEL regulations and risk disclosures strictly to cope with the market.

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DAMPAK MANAJEMEN RISIKO PADA KINERJA KEUANGAN BANK UMUM KONVENSIONAL DI INDONESIA

Jurnal Magister Akuntansi Trisakti ◽

10.25105/jmat.v8i1.8148 ◽

2021 ◽

Vol 8 (1) ◽

pp. 29

Author(s):

Kiki Afita Andriyani ◽

Farah Margaretha Leon

Keyword(s):

Risk Management ◽

Financial Performance ◽

Financial Stability ◽

Management Practices ◽

Liquidity Risk ◽

Operational Risk ◽

Interest Rate Risk ◽

Bank Management ◽

Conventional Banks ◽

The Impact

Abstract This study was conducted to examine the impact of risk management on the financial performance of conventional banks in Indonesia. Effective and efficient banking industry financial performance from time to time is highly expected to maintain banking financial stability itself and even the stability of a country. The increase in losses borne by banks as a result of inadequate risk management practices is a major concern of bank management and regulators. The data tested in this study is conventional bank data that listed on the Indonesia Stock Exchange during the 2015-2019 period. Data analysis using Multiple Linear Regression Model. The results show that there is a significant relationship between market risk management (NIM), operational risk management (BOPO) and liquidity risk management (LDR) with bank financial performance (ROA). Meanwhile, credit risk management (NPL) has no effect on bank financial performance (ROA). For this reason, it can be said that adequate risk management practices as demonstrated by the ratio of interest rate risk, liquidity risk and operational risk are the main driving factors for profitability for the banking sector in Indonesia. Therefore, bank management must mobilize resources to understand a sound risk management system which in turn will have an impact on improving the bank's financial performance.Keywords: Conventional Banks, Risk Management, Financial Performance.

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Risk Management & Financial Performance of Commercial Banks in Pakistan

Lahore Journal of Business ◽

10.35536/ljb.2020.v9.i1.a4 ◽

2020 ◽

Vol 9 (1) ◽

pp. 87-103

Author(s):

Ghulam Saghir ◽

Emad Tabassam Ch

Keyword(s):

Panel Data ◽

Credit Risk ◽

Financial Performance ◽

Financial Institutions ◽

Cross Sections ◽

Commercial Banks ◽

Financial Risk ◽

Developing Economies ◽

Liquidity Risk ◽

The Impact

The main objective of this study is to find out how, the two different types of risks,i.e. Liquidity Risk & Credit Risk,affect the overall profitability/financial performance of commercial banks in Pakistan. We used methods that were applicable on a panel data for long run and short run time specifications. Thirty-three scheduled banks listed with the SBP,as of December 2018 have been used for the purpose of the data analysis. The panel data that is used for this study stretches across a period of 10 years,with 33 cross sections. The findings of this current study revealed that the financial performance of the banks present in Pakistan is negatively,and significantly influenced by the credit risk. In addition to this, it was revealed that the lesser the non-performing loans, the lower the risk factor that is experienced. The financial risk comprising of credit risk and liquidity risk tends to have a significantly robust impact on the overall enactment of the commercial banks in Pakistan. This study will prove beneficial for the top management of the financial institutions developing economies, as it will enhance their existing knowledge regarding the impact of financial risk, which will eventually infiltrate into the intensity and quality of the financial performance of the banks. This will also enable banks, and other financial institutions to involve all the relevant stakeholders,in order to determine how they can minimize the effects of the financial risk,so as to maximize the overall returns.

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INTELLECTUAL CAPITAL AND FINANCIAL PERFORMANCE: BANKS’ RISK AS THE MEDIATING VARIABLE

Jurnal Manajemen dan Kewirausahaan ◽

10.9744/jmk.22.1.21-32 ◽

2020 ◽

Vol 22 (1) ◽

pp. 21-32

Author(s):

Anastasia Dian Cahyaningrum ◽

Apriani Dorkas Rambu Atahau

Keyword(s):

Financial Performance ◽

Intellectual Capital ◽

Liquidity Risk ◽

Sampling Technique ◽

Financial Statements ◽

Research Data ◽

Partial Least Square ◽

Least Square ◽

The Impact ◽

The Relationship

This study seeks to investigate the impact of intellectual capital on banks’ financial performance with banks’ risks as the intervening variable. By using the purposive sampling technique, we selected 30 sample firms from publicly listed Indonesian banks in 2015–2017. This study generated the research data from banks’ financial statements in those years. We then analyzed our data by using the Partial Least Square. The results demonstrate that banks’ risks do not mediate the relationship between intellectual capital and banks’ financial performance. Meanwhile, intellectual capital negatively affects operational risk and market risk. In addition, credit risk negatively affects banks’ financial performance, and liquidity risk negatively affects banks’ financial performance. Lastly, intellectual capital does not affect banks’ financial performance.

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CAPITAL STRUCTURE, PROFITABILITY AND FIRM VALUE: EVIDENCE FROM MINING COMPANIES

Emerging Markets Business and Management Studies Journal ◽

10.33555/ijembm.v4i1.57 ◽

2018 ◽

Vol 4 (1) ◽

pp. 1-12

Author(s):

Diga Cendekia Budianto ◽

Yosman Bustaman

Keyword(s):

Capital Structure ◽

Financial Performance ◽

Firm Size ◽

Firm Value ◽

Control Variable ◽

Total Asset ◽

Revenue Growth ◽

Mining Companies ◽

The Impact ◽

The Capital Structure

This research investigates the impact of firm capital structure on profitability and firm value of the twenty eight mining companies listed in Indonesia Stock Exchange from the year 2009 to 2013. The capital structure is measured by the proportion of debt over total asset, ROA and ROE are used to measure the firm profitability, meanwhile stock price is applied to measure firm value. This study uses panel data regression analysis. After controlling with external factor such as GDP rate and inflation rate, and internal factor such as revenue growth and firm size (total asset), we find leverage has negative impact on ROA however they are not significant, thus it could be said capital structure has no effect on financial performance. The indicators that significantly affect financial performance come from the control variable, which is revenue growth. Our research also finds that the capital structure has a significant effect towards firm value. The firm size and GDP rate is more impactful towards firm value. This contradicts with the MM’s capital structure irrelevance proposition, but supports other theories such as pecking order theory and Trade-off theory

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ANALISIS RASIO UNTUK MENGUKUR KINERJA KEUANGAN PERUSAHAAN (STUDI KASUS PADA PT MEKAR KARYA PRATAMA)

Jurnal Ilmiah Binaniaga ◽

10.33062/jib.v9i1b.330 ◽

2019 ◽

Vol 9 (1B) ◽

pp. 15

Author(s):

Rizki Ahmad Fauzi

Keyword(s):

Financial Performance ◽

Financial Statements ◽

Corporate Activity ◽

Significant Change ◽

Overall Ratio ◽

The Impact ◽

Solvency Ratio

Based on the results of the analysis of the ratio of the financial statements can be seen from liquidity ratio in 2010 can already be said to be liquid and in 2011 occurred very significant increase in this ratio that makes the company's liquidity to be too high. Judging from the solvency ratio, in 2010 the company could not be said solvable because the value of this ratio is still quite high. However, in 2011 this ratio decreased significantly which shows that the company can already be said to be solvable. From the ratio of the activity, in 2010 and 2011 the ratio of corporate activity can already be said to be good. Despite the decrease from 2010 to 2011 on some of these ratios, but the overall ratio of activity of the company is good enough. Judging from the ratio of profitability, in 2010 and 2011 the profitability of the company can not be said to be good because it is still very low and no significant change from the year 2010 to the year 2011 for this ratio.The overall financial performance of PT Mekar Karya Pratama from year 2010 to year 2011 can be said to be good, although there are some things that must be considered and they should be repaired as liquidity is too high which causes the idle funds and the impact on the profitability is low. Keyword:Rasio Analysis

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A Study on the Impact of Family-friendly Certification on Financial Performance of SMEs: Focusing on the Manufacturing Industry

Restaurant Business ◽

10.26643/rb.v118i2.7259 ◽

2019 ◽

Vol 118 (2) ◽

pp. 7-12

Author(s):

Ok-Hee Park ◽

Kwan-sik Na ◽

Seok-Kee Lee

Keyword(s):

Financial Performance ◽

Family Life ◽

Manufacturing Industry ◽

Work And Family ◽

Family Friendly ◽

The Future ◽

The Impact

Background/Objectives: The purpose of the paper is to examine how family-friendly certificates introduced to pursue the compatibility of work and family life affect the financial performance of small and medium-sized manufacturers, and to provide useful information to companies considering the introduction of this system in the future.

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