scholarly journals Performance Of The South African Banking Sector Since 1994

2014 ◽  
Vol 30 (4) ◽  
pp. 1183 ◽  
Author(s):  
Christopher Ifeacho ◽  
Harold Ngalawa
Keyword(s):  
Quality Management ◽  
Interest Rates ◽  
South African ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
The South ◽  
Macroeconomic Variables ◽  
Asset Quality ◽  
The Impact

This study investigates the impact of bank-specific variables and selected macroeconomic variables on the South African banking sector for the period 1994-2011 using the capital adequacy, asset quality, management, earnings, and liquidity (CAMEL) model of bank performance evaluation. The study employs data in annual frequency from South Africas four largest banks, namely, ABSA, First National Bank, Nedbank, and Standard Bank. These banks account for over 70% of South Africas banking assets. Using return on assets (ROA) and return on equity (ROE) as measures of bank performance, the study finds that all bank-specific variables are statistically significant determinants of bank performance. Specifically, the study shows that asset quality, management quality, and liquidity have a positive effect on both measures of bank performance, which is consistent with a priori theoretical expectations. Capital adequacy, however, exhibits a surprising significant negative relationship with ROA, while its relationship with ROE is significant and positive as expected. Except for interest rates (in the ROA model), unemployment rate (in the ROA model), and the rate of inflation (in the ROE model), the rest of the macroeconomic variables are statistically insignificant. The study reveals that bank performance is positively related to interest rates and negatively related to unemployment rates and interest rates.

scholarly journals Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

2021 ◽  
Vol 15 (1) ◽  
Author(s):  
Xiaonan Li ◽  
Chang Song
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Chinese Government ◽  
Target Market ◽  
Geographic Diversification ◽  
Cross Sectional ◽  
The Impact ◽  
Geographical Diversification

AbstractAfter the opening up of the banking sector to domestic and foreign capitals which is approved by the Chinese government, the China Banking Regulatory Commission (CBRC) has permitted city commercial banks to diversify geographically. Since this deregulation in 2006, city commercial banks began to geographically diversify to occupy the market and acquire more financial resources. To examine the causal relationship between geographical diversification and bank performance, we construct an exogenous geographical diversification instrument using the gravity-deregulation model and a policy shock. We find that bank geographical diversification negatively affects bank performance. Moreover, we conduct some mechanism tests in the Chinese context. We find that the target market with several large- and medium-sized banks and a high level of local protectionism in the target market decreases the performance of city commercial banks. Finally, cross-sectional analyses show that the impact of geographical diversification on banks’ performance is more notable among city commercial banks that are younger, and have a lower capital adequacy ratio and a higher non-performing loan ratio.

scholarly journals Impact of Macroeconomic Factors on Banking Profitabilty

2018 ◽  
Vol 5 (1) ◽  
pp. 44
Author(s):  
Lutfullah Lutf ◽  
Hafizullah Omarkhil
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Related Factors ◽  
Comparative Performance ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Interest Income ◽  
Long Run ◽  
The Impact

This study comparatively focuses on the impact of macroeconomic determinants and the internal indicators on bank performance. It comparatively evaluates the differential effects of macroeconomic variables and bank specific variables. Thus, considering five-five banks from each system, a comparative performance investigation between conventional & Islamic banks is the aim of this paper. To determine the short-run and long-run impact of these factors, co-integration & general to specific approach are adopted. This study also considers bank specific and macroeconomic variables in two separate models (Return on Assets and Return on Equity). Our objective is to find whether or not Islamic banks are performing well in the country as compared to their conventional counterparts. The results indicate that in the long run, Gross Domestic Product, and inflation, is positively related to performance, while Interest rate has no effect on the performance of banking sector in Pakistan. Similarly, bank size, capital adequacy, expenses, interest income and non-interest income are the bank related factors that significantly influence the performance of financial sector.

scholarly journals ANALISIS PERBANDINGAN PENILAIAN KINERJA PERBANKAN MENURUT SE Bl 1997 DAN SE BI 1998

2017 ◽  
Vol 8 (4) ◽  
pp. 485
Author(s):  
Lydia Setyawardani
Keyword(s):  
Quality Management ◽  
Financial Statements ◽  
Capital Adequacy ◽  
Financial Ratios ◽  
Bank Performance ◽  
Research Issue ◽  
The Government ◽  
Asset Quality

We can evaluate the bank health from financial  ratios in its financial  statements.  The fi nancial ratios are known as ('AMEL (capital adequacy, asset quality, management, earning, liquidity). The government changes the regulation of evaluation of bank health. The new regulation we use now is SE HI No. 30 23: UPPB, 19 March 1998 and the old one is SE Bl No. 30   2   UPPB. 30 April 1997.The research issue is whether /here any significant changes in bank performance if we use the new reKulation than the old one. The chanRes consist of three financial ratios there are two ratios <?f'asset quality and one liquidity ratio. The measurement calculates the credit values from .financial ratios according to the old regulation and the new one and then comparing the results.The results show that there are any signlficant changes in bank performance using the new regulation. The results also show that using the new regulation to measure the bank health makes more difficultj(Jr the bank to get the predicate as a good bank.

scholarly journals The Impact of Credit Risk Management and Macroeconomic Variables on Bank Performance in Nigeria

2020 ◽  
Vol 17 ◽  
Keyword(s):  
National Income ◽  
Least Square ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Credit Management ◽  
Macroeconomic Variables ◽  
Negative Effect ◽  
High Level ◽  
The Impact ◽  
Bad Debt

The aim of this paper is to identify the main impact that credit management and macroeconomic variables have on bank performance in Nigeria. The reason for this is the numerous high level of deposit money banks’ bad debt based on available data. The bad debt tended to have a negative effect on performance. To this end, the researchers conducted a study using macroeconomic data, and other indicators of credit management and bank performance from 2009-2017 using 12 deposit money banks in Nigeria. The ordinary least square (OLS) method was utilized to determine the factors that explains the subject matter. The result showed the presence of a positive connection between the capital adequacy proportion and the sum national income on the Return on Asset. Therefore, Depositing Money Banks with a greater proportion of capital sufficiency can all the more likely develop more advances and retain credit misfortunes whenever it occurs and thus document better financial productivity as for the assets.

Analysis of the Factors Affecting Bank Profitability: Evidence of Tanzania Commercial Banks

2021 ◽  
Vol 39 (8) ◽  
Author(s):  
Lisa Estrada Ngweshemi ◽  
Aliya Zhakanova Isiksal
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Management Control ◽  
Capital Adequacy ◽  
Internal Variables ◽  
Factors Affecting ◽  
External Data ◽  
Private And Public ◽  
Asset Quality ◽  
The Impact

Only a successful and consistent banking sector can play the role of financial intermediary in the economy properly. As an intermediary in the modern economy, the bank must be profitable. The general aim of this study focuses on analyzing the factors that influence the profitability of private and public commercial banks in Tanzania. By the use of annual time series internal and external data for the period 2013 to 2019, and a quantitative approach methodology using GMM technique analysis of the impact of the selected determinants was made. The results from bank-internal variables comprised of four statistically significant variables which are capital adequacy, asset quality, loan composition, and cost efficiency while the rest is insignificant. Likewise, the macro-economic determining factors (growth domestic product (GDP) and inflation rate) were found to be non-significant. The empirical results have shown that profitability is more explained by bank-specific determinants that are directly controlled by the management than the macroeconomic factor variables which are beyond the reach of management control.

scholarly journals The Role of Using CAMELS Model in Analyzing the Factors Affecting the Performance of The Jordanian Commercial Banks (2014-2019)

2021 ◽  
Vol 17 (2) ◽  
pp. 3-11
Author(s):  
Senan Amer
Keyword(s):  
Quality Management ◽  
Commercial Banks ◽  
Capital Adequacy ◽  
Rate Of Return ◽  
Return On Assets ◽  
Return On Equity ◽  
Factors Affecting ◽  
Management Efficiency ◽  
Asset Quality ◽  
The Impact

In this study, the factors affecting the performance of Jordanian commercial banks have been analyzed using the elements of the CAMELS model, along with identifying the most important factors. The study targeted the impact of twenty Jordanian commercial banks on performance-; these banks were listed on the Amman Stock Exchange during the period of 2014-2019. The researcher used the Data Pooled Regression Method, due to its relevance to the nature of the data used in the study, where this method is used in the case of a time series and cross-sectorial data. The Rate of Return on Assets and the Rate of Return on Equity were used as the two variables on which the banks’ performance was measured. However, the independent variables included the CAMELS model elements which are capital adequacy, asset quality, management efficiency, earnings, liquidity, and sensitivity to market risks, in addition to macroeconomic variables, which include the rate of economic growth and the rate of inflation. The study concluded that capital adequacy, asset quality, management efficiency, and earnings are among the most important and most influential factors with regards to the Jordanian commercial banks, which - are is represented by the Rate of Return on Assets and the Rate of Return on Equity. Moreover, the study also concluded that it is possible to derive a miniature model from the CAMELS model called the CAME model, which has a great ability to explain and measure the performance of commercial banks in Jordan. Finally, the study recommended the Central Bank of Jordan to use the CAMELS model to evaluate Jordanian commercial banks.

scholarly journals An analysis of competition, efficiency and soundness in the South African banking sector

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Busani Moyo
Keyword(s):  
South African ◽  
Banking Sector ◽  
Stochastic Frontier ◽  
The South ◽  
Data Set ◽  
Stochastic Frontier Models ◽  
International Banks ◽  
Negative Effect ◽  
The Impact ◽  
Bank Soundness

Background: The banking sector plays an important role in economic activity: it mobilises savings and channels them to productive sectors thus encouraging the efficient allocation of resources. The competitive nature of the environment under which the banking sector operates is of paramount importance.Aim: The main aim of this study was to investigate the relationship between competition, efficiency and soundness in the South African banking sector.Setting: The setting for this study was the South African banking sector.Methods: We used a data set of 17 local and international banks for the period 2004–2015 and stochastic frontier models to analyse efficiency.Results: Results show that the impact of competition on efficiency depended on the measure of competition used. When using the Lerner index there was a negative effect of competition on efficiency while the opposite was true when using the theoretically robust Boone indicator.Conclusion: In the case of bank soundness, competition using the Boone indicator is negatively related to the Z score, implying that competition enhances bank soundness and these results supported the prudent and efficient management hypothesis.

scholarly journals Macroeconomic and Idiosyncratic Factors of Non-Performing Loans: Evidence from Pakistan’s Banking Sector

2019 ◽  
Vol 1 (2) ◽  
pp. 44-71
Author(s):  
Naseem Ashraf ◽  
Qurrat Ul Ain Butt
Keyword(s):  
Quantitative Research ◽  
Banking Sector ◽  
Random Effect ◽  
Random Effect Model ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Asset Quality ◽  
Macroeconomic Determinants ◽  
The Impact

Using panel data approach in the Pakistan banking sector over the period 2010 to 2016, we examine the bank-specific and macroeconomic determinants of non-performing loans.  We use quantitative research design with OLS random effect model. Furthermore, we use various regression and correlation analysis in this study. We find that rise in capital adequacy ratio, bank size, GDP growth rate, and inflation, reduces the non-performing loans (NPL) ratio. Our results also show that a rise in loan loss provisions enhances the NPL ratio. Our results suggest that banks with poor asset-quality can sabotage the growth of fiscal as well as the economic sector. Outcomes of the study emphasis on the need to clear-out the NPLs to keep financial sector sound. NPLs can cause high loan loss provisions which affect the capitalization of banks that ultimately impacts fiscal and economic growth. Bank supervisory agencies should therefore pay attention to monitory and macroeconomic policies of the banks. This study examines the impact of idiosyncratic and macroeconomic determinants of non-performing loans on banks’ asset quality using recent data from 2010 to 2016, the time period when major banking sector reforms were launched.

scholarly journals Bank Specific Factors and Bank Performance: Evidence from Nigeria

2020 ◽  
Vol 9 (2) ◽  
pp. 167-176
Author(s):  
Ebenezer Mayowa Ariyibi ◽  
Lateef Adewale Yunusa ◽  
Tolulope Oyakhilome Williams
Keyword(s):  
Panel Data ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Bank Performance ◽  
Research Use ◽  
Significant Negative Relationship ◽  
Specific Factors ◽  
Asset Quality ◽  
The Impact ◽  
Bank Specific Factors

The impact of bank-specific factors on the performance of the deposit money banks in a country has been an area of inquiry for any bank-based financial system. The research investigates the impacts of bank-specific factors on bank performance in Nigeria within 2014-2018. This research use panel data from ten banks that had the best deposit in 2018. The panel data approach found a significant negative relationship between asset quality and return on asset and a significant positive relationship between loan-to-deposit ratio, capital adequacy, and return on asset. In this regard, strategic management should ensure chasing their functional intermediation role and ensure liquidity preference to meet its day-to-day obligations.JEL Classification: G21, G32, C33 How to Cite:Ariyibi, E. M., Yunusa, L. A., & Williams, T. O. (2020). Bank Specific Factors and Bank Performance: Evidence from Nigeria. Signifikan: Jurnal Ilmu Ekonomi, 9(2), 167-176. https://doi.org/10.15408/sjie.v9i2.14658.

scholarly journals ANALISIS PERBANDINGAN PENILAIAN KINERJA PERBANKAN MENURUT SE Bl 1997 DAN SE BI 1998

2018 ◽  
Vol 8 (4) ◽  
pp. 485-507
Author(s):  
Lydia Setyawardani
Keyword(s):  
Quality Management ◽  
Financial Statements ◽  
Capital Adequacy ◽  
Financial Ratios ◽  
Bank Performance ◽  
Research Issue ◽  
The Government ◽  
Asset Quality

We can evaluate the bank health from financial  ratios in its financial  statements.  The fi nancial ratios are known as ('AMEL (capital adequacy, asset quality, management, earning, liquidity). The government changes the regulation of evaluation of bank health. The new regulation we use now is SE HI No. 30 23: UPPB, 19 March 1998 and the old one is SE Bl No. 30   2   UPPB. 30 April 1997.The research issue is whether /here any significant changes in bank performance if we use the new reKulation than the old one. The chanRes consist of three financial ratios there are two ratios <?f'asset quality and one liquidity ratio. The measurement calculates the credit values from .financial ratios according to the old regulation and the new one and then comparing the results.The results show that there are any signlficant changes in bank performance using the new regulation. The results also show that using the new regulation to measure the bank health makes more difficultj(Jr the bank to get the predicate as a good bank.

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