scholarly journals Long-run Effects of Market Risk Factors on Bank Performance in the SSA Banking System

2021 ◽  
Vol 17 (41) ◽  
pp. 130
Author(s):  
Changjun Zheng ◽  
Sinamenye Jean-Petit
Keyword(s):  
Risk Factors ◽  
Commercial Banks ◽  
Banking System ◽  
Market Risk ◽  
Sub Saharan Africa ◽  
Bank Performance ◽  
Performance Factors ◽  
Market Risks ◽  
Long Run

The study assesses the long-term effects of market risk factors on bank performance in the Sub-Saharan Africa banking system. The article identifies the most influential market risk factor and the most affected bank performance factors in the long term. It covers 40 countries with 350 commercial banks for ten years. The analysis uses dynamic fixed-effects models (ARDL-DFE). The results demonstrated that non-performing loans are the most influencers affecting bank performance factors in the long run. Furthermore, the results show that return on average assets is the most bank performance factor affected mainly by market risks, especially the NPLs in the long run. Finally, the findings surprisingly proved mutual interactions and cointegration movements among bank market risk factors and bank performance measures in the long run. These findings can assist central banks in supervising and regulating SSA commercial banks and inspire regional bank managers in reducing market risks and sharpening long-run performance strategies through resource reallocating.

scholarly journals Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

2020 ◽  
Vol 20 (2) ◽  
pp. 279-297
Author(s):  
Odunayo M. Olarewaju
Keyword(s):  
Commercial Banks ◽  
Dividend Policy ◽  
Banking Sector ◽  
Market Risk ◽  
Agency Cost ◽  
Sub Saharan Africa ◽  
Bank Performance ◽  
Long Run ◽  
Sub Saharan ◽  
The Relationship

Abstract Research Background: The concept of risk is of great importance in any financial system, due to unstable economic situations and fluctuating environmental factors. Like other variables, risk has a significant effect on firms’ returns and profit. Purpose: This study aims at examining the relationship between dividend policy and performance taking cognisance of the uncontrollable risk (market risk). Research methodology: This study was modelled using 250 commercial banks from 30 selected Sub-Saharan African countries in the period 2008 to 2017. The Panel-Vector Error Correction Model was used to estimate the model. Result: From the long run analysis, a long run relationship between dividend policy, agency cost, and bank performance is evident. The disequilibrium will take about 39.5% yearly speed of adjustment to return to a steady state. There is an inverse relationship between Lending interest rate (market risk proxy) with bank performance while there is a positive relationship of foreign exchange rate (market risk proxy) and bank performance in SSA. Novelty: Market risk’s influence on the relationship between dividend policy and bank performance was firstly established. Therefore, it is recommended that the banking sector in SSA should focus more on endogenous factors and review some of their policies as these contribute more significantly to variations in their performance than exogenous factors.

scholarly journals A Decision Support Model for Measuring Technological Progress and Productivity Growth: The Case of Commercial Banks in Vietnam

Axioms ◽  
2021 ◽  
Vol 10 (3) ◽  
pp. 131
Author(s):  
Chia-Nan Wang ◽  
Ngoc-Ai-Thy Nguyen ◽  
Thanh-Tuan Dang ◽  
Thi-Thuy-Quynh Trinh
Keyword(s):  
Productivity Growth ◽  
Commercial Banks ◽  
Banking System ◽  
Bank Performance ◽  
Net Income ◽  
Decision Support Model ◽  
Bottom Line ◽  
Window Analysis ◽  
Dea Models ◽  
Managerial Implications

The interactive relationship between the banking system and enterprise makes up the role that affects a national economy. Significantly, the relationship between banking and technology has become tighter over the past few decades. An assessment of bank performance is critical for understanding their position and provides valuable information to practitioners. In this paper, we assess the performance of the top 18 commercial banks in Vietnam during 2015–2019. The assessment utilizes two data envelopment analysis (DEA) models while involving the banks’ performance in six dimensions, including assets, deposits, operating expenses, liabilities as inputs, while treating loans and net income as outputs. Using the Malmquist measurement, the total productivity growth indexes of the banks are obtained, which are decomposed into technical and technological evolutions. Window analysis is used to compute the efficiencies of the banks in every single year in 2015–2019. From the results of Malmquist, most banks are found to decrease their Malmquist productivity indexes from 2015 to 2019, wherein both of their technical and technological indexes declined. Window analysis indicates B6-SHBank, B1-Vietinbank, and B18-PetrolimexGroup as the most efficient banks during 2015–2019, and in the interim, B16-BaoVietBank, B11-NationalCitizen, and B13-VietnamMaritime ranked on the bottom line. The managerial implications of this research help to reflect the comprehensive insights of the top Vietnamese commercial bank performance and offer a strategic guideline for decision-makers toward sustainable development in the banking industry.

scholarly journals Governance of Vietnam's Financial Institutions in Accordance with International Standards until 2020

2016 ◽  
Vol 23 (01) ◽  
pp. 50-76
Author(s):  
Huong Tram Thi Xuan ◽  
Canh Nguyen Phuc ◽  
Nhu Nguyen Tu
Keyword(s):  
Multiple Regression ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Banking System ◽  
Commercial Banking ◽  
International Standards ◽  
Bank Performance ◽  
Related Factors ◽  
Regression Approach ◽  
Shed Light

In this article, using a combination of risk-related factors, we address the governance of financial institutions, mainly Vietnam’s commercial banks, in light of such international standards as of Basel II and III. Additionally, we employ multiple regression approach to shed light on the effect of each type of risk on bank performance and propose a few recommendations for effectively governing the commercial banking system of Vietnam until 2020.

scholarly journals Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks

2019 ◽  
Vol 12 (3) ◽  
pp. 138 ◽  
Author(s):  
Ngoc Nguyen
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Transformation Model ◽  
Annual Reports ◽  
Bank Performance ◽  
Method Of Moment ◽  
Revenue Diversification ◽  
Interest Income ◽  
Using Data

In the future, when the process of economic integration in the banking sector is more powerful, and competitive, diversifying revenue is an inevitable and objective trend to help the banks increase profits, minimize risks and improve their competitive position in the system. The research is on the relationship between revenue diversification, risk and bank performance using data from audited financial statements and annual reports of 26 commercial banks listed and unlisted in Vietnam during the period 2010–2018. The research method uses Generalized Method of Moment (GMM) modeling techniques to solve endogenous problems, variance and autocorrelation in the research model. Research results show that diversification negatively impacts profitability and the higher the diversification, the higher the risk of commercial banks. However, the more diversified listed banks, the more increased the bank’s stability. The banks show the weakness and lack of experience of the banking system in developing a reasonable profit transformation model. The revenue diversification of banks is currently passive and moves slowly. Interest income is still the motivation of bank development, boosting profit growth. Growth, as well as the contribution from service activities, is not commensurate with potentials; although there are many positive points, they are not enough to cover risks from net interest income activities.

Foreign exchange positions and risks of czech banks

1997 ◽  
Vol 6 (1) ◽  
Author(s):  
Josef Jílek ◽  
Jiřina Jílková
Keyword(s):  
Foreign Exchange ◽  
Banking System ◽  
Market Risk ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Market Risks ◽  
Current State ◽  
National Bank ◽  
Foreign Exchange Trading

Almost every bank has some degree of foreign exchange exposure. A bank, which holds net open positions in foreign currencies is exposed to the risk that exchange rates may move against it. Net open positions are due to foreign exchange trading positions or because of exposures caused by firm's overall assets and liabilities. Czech National Bank has imposed limits of FX risks and is thus limiting maximum potential loss of the Czech banking system. The paper describes the way how to calculate a bank's open FX positions and the current state of FX positions in selected Czech commercial hanks. The FX risk is a part of market risk. The Capital Adequacy Directive (CAD) and Basle Committee on Banking Supervision in its document Amendment to the Capital Accord to Incorporate Market Risks set out the minimum capital requirements for credit institutions and investment firms with respect to market risk.

scholarly journals Trends in the development of the banking system in the Far North of the Russian Federation

2020 ◽  
Vol 210 ◽  
pp. 13041
Author(s):  
Lyudmila Pushkareva ◽  
Mikhail Pushkarev
Keyword(s):  
Russian Federation ◽  
National Economy ◽  
Commercial Banks ◽  
Banking System ◽  
Financial Resources ◽  
Real Sector ◽  
Political Situation ◽  
Far North ◽  
The Russian Federation

In this paper, the author summarizes the main problems that have to be solved by regional commercial banks and, in particular, banks in the Far North and equivalent territories in the current political situation and conditions of economic sanctions. The country's banking system is not adequate to the needs of the national economy and is unable to provide resources for the country's modernization. The ability of banks to finance the needs of the real sector is significantly constrained by the lack of long-term and cheap financial resources from the banks themselves.

scholarly journals Corporate Social Responsibility and Bank Performance: A Co-integration Approach

2019 ◽  
Vol VOLUME 8 (2019) ◽  
pp. 31-59
Author(s):  
John Gartchie Gasti ◽  
Joseph Ameyibor ◽  
Edward Quansah
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Secondary Data ◽  
Bank Performance ◽  
Long Term Effects ◽  
Panel Ardl ◽  
Integration Approach ◽  
Long Run ◽  
Corporate Social

The aim of this study is to examine the short- and the long-run effects of Corporate Social Responsibility (CSR) on the performance of listed Ghanaian banks. An elongated balanced panel design with secondary data of 65 years’ bank observations spanning 2004 to 2016 was used for the study. A co-integration approach – Pooled Mean Group (PMG/Panel ARDL) – was used to examine the short- and the long-term effects of CSR on bank performance while controlling for bank variability, growth in interest income and bank size. The results were mixed. In the short term, it was found that CSR has positive but insignificant effect on bank performance (market-to-book value). In the long-term, however, CSR has significant negative effect on bank performance. Based on the findings, the study concludes that, in the long run, engaging in CSR reduces bank performance. Therefore, CSR needs to be carefully planned and implemented to serve as a boost to bank performance and not just regarded as an inconsequential addendum.

scholarly journals Effect of energy and CO2 consumption on the economy in Sub-Sahara Africa

2020 ◽  
Vol 5 (1) ◽  
Author(s):  
Josiah Chukwuma Ngonadi ◽  
Sun Huaping ◽  
Joy Okere ◽  
John Uche Ngonadi
Keyword(s):  
Economic Growth ◽  
Democratic Republic Of Congo ◽  
Sub Saharan Africa ◽  
Co2 Production ◽  
Special Effects ◽  
Economy Growth ◽  
Long Run ◽  
Causality Tests ◽  
Sub Saharan

The study focused on the long-term related effect among energy consumption (EC), CO2 production and economy growth (EG) of 12 randomly selected countries in sub-Saharan Africa. We used validation and causality tests in the 2008-2018 annual record. Special effects vary from country to country, in the long term, strong consumption of energy and economy growth in many countries has been linked with an increment in air pollution. The observation of the longitudinal study showed economic growth resulting in short-term CO2 emissions in Benin, the Democratic Republic of Congo, Ghana, Nigeria and Senegal, reflecting a lack of economy. This would not be possible without affecting the environment. The effect between CO2 and EG in Gabon, Nigeria and Togo has shown that environmental policies aimed at reducing pollution can be harmful. economic growth. In addition, long-term economic and CO2 production in Nigeria has been closely linked to the long-term links to Congo and Gabon. In the long-run, greenhouse gas emissions are the result of EC, EG and CO2 emission in Benin, Ivory Coast, Nigeria, Senegal, South Africa and Togo.

scholarly journals Analysis of Savings-Investment Gap in Sub-Saharan Africa: Does the nexus between Foreign Remittances and Domestic Financial Sector matter?

2021 ◽  
Author(s):  
Oluwatosin Adeniyi ◽  
Joshua Ogunjimi ◽  
Wasiu Adekunle ◽  
Musibau Babatunde ◽  
Edward Omiwale
Keyword(s):  
Financial Development ◽  
Migrant Workers ◽  
Forecast Accuracy ◽  
Sub Saharan Africa ◽  
Interactive Effects ◽  
Panel Ardl ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

Abstract In recent times, increasing attention is being paid to examine the developmental impact of remittances inflow, particularly due to the emergence of remittances as the fastest growing source of capital flows for developing countries. To this end, we contribute to the literature by analyzing the interactive effects of remittances and financial development on savings-investment gap for a panel of 18 Sub-Saharan African (SSA) countries over the period of 1990 to 2017. Our Panel ARDL model estimation showed that higher remittances have significant reducing effect on savings-investment gap in the long run, and this becomes magnified while accounting for individual and interactive effects of remittances and financial development. We also uncovered the widening effects of rising real GDP growth and bank deposits over a long-term horizon, whereas higher private sector credit widens the savings-investment gap only in the short-run. Meanwhile, liquid liabilities have no significant effect on savings-investment gap both in the short run and long run. We further offered evidence on the complementarity and substitutability effects of remittances and financial development over the short-term and long-term horizons, respectively. We also demonstrated the superior forecast accuracy of the predictive savings-investment gap model - that accounts for both individual and interactive effects - over other specifications, and this is robust to the choice of financial development indicators, samples and forecast horizons. Our results underscore the urgent need for a reduction of transfer costs, so as to encourage both migrant workers and their beneficiaries to make use of the official channels for sending and receiving remittances in the region.

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