scholarly journals Capital structure and profitability: An empirical study of South African banks

2016 ◽  
Vol 14 (1) ◽  
pp. 8-19 ◽  
Author(s):  
Kudzai Raymond Marandu ◽  
Athenia Bongani Sibindi
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
South African ◽  
Time Series Data ◽  
Emerging Market ◽  
Strong Relationship ◽  
Capital Adequacy ◽  
Series Data ◽  
Bank Capital ◽  
The Relationship

The bank capital structure debacle in the aftermath of the 2007-2009 financial crises continues to preoccupy the minds of regulators and scholars alike. In this paper we investigate the relationship between capital structure and profitability within the context of an emerging market of South Africa. We conduct multiple linear regressions on time series data of big South African banks for the period 2002 to 2013. We establish a strong relationship between the ROA (profitability measure) and the bank specific determinants of capital structure, namely capital adequacy, size, deposits and credit risk. The relationship exhibits sensitivity to macro-economic shocks (such as recessions), in the case of credit risk and capital but is persistent for the other determinants of capital structure.

scholarly journals The Determinants of South African Banks' Capital Buffers

2018 ◽  
Vol 10 (1(J)) ◽  
pp. 234-244
Author(s):  
Athenia Bongani Sibindi
Keyword(s):  
Capital Structure ◽  
South African ◽  
Fixed Effects ◽  
Bank Capital ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Financing Decisions ◽  
Specific Factors ◽  
Capital Regulations ◽  
The Relationship

The financing decisions of banks remain an enigma, increasingly attracting the attention of banking regulators and corporate finance scholars alike. The ‘buffer view’ of bank capital is premised on the notion that banks keep capital in excess of the regulatory requirements in line with bank specific factors. This study sought to test the ‘buffer view’ of bank capital. Utilising a sample of 16 South African banks for the period 2006-2015, panel data techniques were employed to estimate a fixed effects model to test the relationship between buffer capital and the firm level determinants of capital structure. It was established that the risk and size variables were negatively related to the buffer capital variable, whilst the dividend variable was positively related. This was consistent with the predictions of the buffer view of capital. The findings lend credence to the ‘buffer view’ school of thought about bank capital. These findings are also inconsistent with bank capital regulations solely determining the capital structures of banks but epitomises some measure of voluntary capital structure decision making by banking firms. 

scholarly journals The Relationship Between Profitability and Firm Value: Evidence From Manufacturing Industry in Indonesia

2021 ◽  
Vol 12 (3) ◽  
pp. 466
Author(s):  
Bambang Sudiyatno ◽  
Elen Puspitasari ◽  
Ida Nurhayati ◽  
Tristiana Rijanti
Keyword(s):  
Capital Structure ◽  
Firm Value ◽  
Manufacturing Industry ◽  
Time Series Data ◽  
Negative Impact ◽  
Stock Exchange ◽  
Series Data ◽  
Industrial Companies ◽  
Company Growth ◽  
The Relationship

This study aims to test whether profitability acts as a moderating variable that is able to moderate the influence of the company growth and capital structure on the firm value. The independent variables used in this study are company growth and capital structure, while profitability is the moderating variable.The research sample was taken from manufacturing industrial companies listed on the Indonesia Stock Exchange (IDX) during the period 2016 - 2018. The study used panel data which is a combination of cross section and time series data, with data analysis using multiple regression.The results showed that company growth and profitability had a positive effect on the firm value, while capital structure had does not effect. The results of the analysis show that profitability does not moderate the effect of company growth and capital structure on the firm value, the interaction of company growth and capital structure with profitability has a negative impact on the firm value.

scholarly journals The relationship between βeta and stock returns in the JSE securities exchange in South Africa

2011 ◽  
Vol 9 (1) ◽  
pp. 558-566
Author(s):  
Raphael Tabani Mpofu
Keyword(s):  
South Africa ◽  
Time Series ◽  
Regression Analysis ◽  
Financial Markets ◽  
Stock Returns ◽  
South African ◽  
Time Series Data ◽  
Series Data ◽  
The South ◽  
The Relationship

The purpose of this study was is to examine the relationship between stock βeta and returns in the JSE Securities Exchange. If the model is applicable in its entirety or can explain the beta-stock returns relationship, it raises an important academic question, mainly, how should the South African financial market be viewed by investors and portfolio managers, given the political-social-economical classifications that South Africa finds itself in, sometimes referred to as developing, emerging or underdeveloped? The time-series data used was from Sharenet as well as from the South African Reserve Bank macro-economic time series data. The sample period consisted of 10 years of monthly time series data between January 2001 and December 2010. Regression analysis was applied using the conditional approach. When using the conditional capital asset pricing model (CAPM) and cross-sectional regression analysis, the findings strongly supported the significant relationship between stock excess returns and βeta. However, the results do not provide strong evidence of a CAPM relation between risks and realized return trade-off in the South African financial markets. These results demonstrate that the South African financial markets are complex and financial tools, such as the CAPM can be used to explain complex financial phenomenon as in other developed markets, although complete reliance on the CAPM should be relied upon.

scholarly journals ANALISIS DETERMINAN RASIO MODAL BANK BUMN DI INDONESIA

2016 ◽  
Vol 5 (2) ◽  
pp. 113
Author(s):  
Saifullah Saputra
Keyword(s):  
Exchange Rate ◽  
Credit Risk ◽  
Banking Sector ◽  
Time Series Data ◽  
Multiple Linear Regression Model ◽  
Series Data ◽  
Bank Capital ◽  
Minimum Capital ◽  
Minimum Capital Requirement ◽  
Capital Ratios

Capital aspect is the one very important aspect  in the banking sector,not only for business developing but also  to overcome the  various of risk. Inorder to keep the healty and stability of the state owned bank capital, the centralbank as monetary authority in Indonesia has determine the regulation aboutcapital healty. It looks from the minimum capital requirement that must beenobeyed by banking is 8%. This situation based on economy crisis case in 1997which has an impact on the banking sector. This study aims to analyze the effectof profitability, credit risk, efficiency, liquidity, exchange rate and inflation oncapital ratios of state owned bank in Indonesia. The type of this research aredescriptive and associative using time series data from the first quarter of 2004until the fourth quarter of 2015 with documentation data collected technique.Data were analyzed with multiple linear regression model, the prerequisite test(multicolinearity, autocorrelation and heteroscedasticity), t test, and F test. The result shows that (1) Profitability has positive and significant effect oncapital ratios of state owned bank in Indonesia. (2) Credit risk has positive andsignificant effect on capital ratios of state owned bank in Indonesia. (3)Efficiency has negative and significant effect on capital ratios of state ownedbank in Indonesia.  (4) Liquidity has negative and significant effect on capitalratios of state owned bank in Indonesia. (5) Exchange rate has positive andsignificant effect on capital ratios of state owned bank in Indonesia. (6) Inflationhas positive and not significant effect on capital ratios of state owned bank inIndonesia.

scholarly journals Credit & Liquidity Risk of Asia Pacific Islamic Bank: Evidence from Indonesia & Malaysia

2021 ◽  
Vol 4 (1) ◽  
pp. 68
Author(s):  
Resi Asrianti ◽  
Yaser Taufik Syamlan
Keyword(s):  
Credit Risk ◽  
Risk Taking ◽  
Time Series Data ◽  
Liquidity Risk ◽  
Capital Adequacy ◽  
Third Party ◽  
Asia Pacific ◽  
Series Data ◽  
Islamic Banks ◽  
Islamic Bank

This study aims to analyze the effect of Third Party Funds (TPF), Capital Adequacy Ratio (CAR), Bank Age, Non Performing Financing (NPF), and Return On Assets (ROA) on the level of risk taking of Islamic banks in Indonesia and Malaysia. Risk taking in this study is proxied by Financing Asset Ratio (FAR) and Financing to Deposit Ratio (FDR). The data used in this study are the cross section data of Islamic banks in Indonesia and time series data of 2010 to 2017 from each of the financial statements of Islamic banks in Indonesia and Malaysia which act as the object of this research. This research uses panel data regression method.  Based on the analysis, The TPF and the CAR has big impact on the Credit and Liquidity Risk in both observed country. CAR significantly influenced the credit risk, when the CAR goes up, it is resulted from the addition of equity due to the rise of NPF. Moreover, in the liquidity risk in Indonesia is caused by the mismatch nature of Indonesian funding side. On the other hand, the credit risk in Malaysia rises whenever the TPF increase and the liquidity is caused by the deposit taking and risk taking activity. The introduction of investment account by the Bank Negara is among the factors of significant as well as negative result of it.   This paper urges the OJK to speed up the implementation of Investment Account product in Indonesian Islamic bank since it will reduce the liquidity risk and at the end will decrease the credit risk.

scholarly journals The Role of Noan Performing Financing (NPF) as A Mediator for The Relationship Between Operating Expenses and Operating Income (BOPO) on The Performance of Islamic Banks in Indonesia

2021 ◽  
Vol 5 (1) ◽  
pp. 110
Author(s):  
Julia Safitri ◽  
Intan Shaferi ◽  
Ahmad Ershaid Sami Nusair ◽  
Muhamad Arief Affandi
Keyword(s):  
Credit Risk ◽  
Time Series Data ◽  
Operating Costs ◽  
Series Data ◽  
Bank Performance ◽  
Cost Ratio ◽  
Analysis Tool ◽  
Cross Sectional ◽  
Operating Income ◽  
The Relationship

This study aims to examine and analyze the relationship between the effect of operating costs and operating income on bank performance which is mediated by credit risk. Using data on Islamic banking companies listed on the IDX in 2012-2019. The methodology in this study uses secondary data. Data specification is panel data (pooled data) which is actually a combination of data consisting of time series data and cross-sectional data. The analysis tool used is SEM-PLS with the WarpPLS 7.0 application. The results of this study indicate that credit risk can partially mediate the effect of operating costs and operating income on bank performance. This research is successful in proving that the operational cost ratio is used to measure the level of efficiency and ability of a bank in conducting its operations. The smaller this ratio means the more efficient the operational costs borne by the bank concerned so that the possibility of a bank in a less problematic condition. The smaller this ratio, the better the bank's performance.

scholarly journals The Determinants of South African Banks’ Capital Buffers

2018 ◽  
Vol 10 (1) ◽  
pp. 234
Author(s):  
Athenia Bongani Sibindi
Keyword(s):  
Capital Structure ◽  
South African ◽  
Fixed Effects ◽  
Bank Capital ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Financing Decisions ◽  
Specific Factors ◽  
Capital Regulations ◽  
The Relationship

The financing decisions of banks remain an enigma, increasingly attracting the attention of banking regulators and corporate finance scholars alike. The ‘buffer view’ of bank capital is premised on the notion that banks keep capital in excess of the regulatory requirements in line with bank specific factors. This study sought to test the ‘buffer view’ of bank capital. Utilising a sample of 16 South African banks for the period 2006-2015, panel data techniques were employed to estimate a fixed effects model to test the relationship between buffer capital and the firm level determinants of capital structure. It was established that the risk and size variables were negatively related to the buffer capital variable, whilst the dividend variable was positively related. This was consistent with the predictions of the buffer view of capital. The findings lend credence to the ‘buffer view’ school of thought about bank capital. These findings are also inconsistent with bank capital regulations solely determining the capital structures of banks but epitomises some measure of voluntary capital structure decision making by banking firms. 

scholarly journals PENGUKURAN TINGKAT KESEHATAN PT BANK RAKYAT INDONESIA (PERSERO) TBK DENGAN METODE CAMEL

Media Ekonomi ◽  
2019 ◽  
Vol 25 (2) ◽  
pp. 75
Author(s):  
Wawan Kurniawan
Keyword(s):  
Time Series Data ◽  
Stock Exchange ◽  
Good Health ◽  
Capital Adequacy ◽  
Series Data ◽  
Annual Data ◽  
Bank Capital ◽  
Operating Income ◽  
A Value ◽  
Health Level

<em>Analyze the health level of Bank BRI in Indonesia with camel method</em>. <em>The research methodology used is qualitative descriptive research with case study approach. Which using this type of time series data from secondary data from the Indonesia Stock Exchange. Mechanical sampling using purposive sampling method with annual data from 2011 -2015. Data were analyzed using methods camel in measuring the health level of a bank.</em> <em>The results of this study indicate the ratio of capital represented BRI Bank capital adequacy ratio has a value of CAR above the provisions of Bank Indonesia. The ratio of assets which represented the quality of earning assets Bank BRI has KAP value ratio above the provisions of Bank Indonesia. Management ratio represented the net profit margin of Bank BRI has NPM value ratio above the provisions of Bank Indonesia. Earnings ratios are represented as return on assets and net interest margin of the Bank BRI has a value of ROA and NIM above the provisions of Bank Indonesia. While earnings ratio of other operating expenses operating income represented Bank BRI has BOPO value ratio above the provisions of Bank Indonesia. Liquidity ratio as represented current ratio of Bank BRI has a CR value ratio above Bank Indonesia. While other liquidity ratio as represented loan to deposit ratio and loan to assets ratio has a value of Bank BRI LAR LDR and above the provisions of Bank Indonesia. The health level of banks which is calculated based on the CAMEL ratio showed BRI is a bank that has a good health level.</em>

scholarly journals Family business definition: a matter of concern or a matter of convenience?

2014 ◽  
Vol 11 (2) ◽  
pp. 274-280 ◽  
Author(s):  
Shehabaddin Abdullah A. Al-Dubai ◽  
Ku Nor Izah Ku Ismail ◽  
Noor Afza Amran
Keyword(s):  
Family Business ◽  
Time Series Data ◽  
Emerging Market ◽  
Series Data ◽  
Family Ownership ◽  
Cross Sectional ◽  
Different Types ◽  
Industry Sectors ◽  
The Impact ◽  
The Relationship

This paper attempts to examine the impact of adopting multiple family ownership cut-offs in defining family businesses, family ownership measurements, and conducting different types of analyses. For achieving this goal we have focus on the relationship between family ownership and firm performance (ROA) in the context of emerging market (Saudi Arabia), controlling for firm’s debt, age, size and industry sectors. With three family ownership cut-offs: 5%, 10%, and 20% and two type of analysis (cross-sectional and cross-sectional and time-series data) as well as two types of family ownership measures (ratio and dummy), we fond that the relationship between the two variables is consistent despite of the level of family ownership cut-off, analysis type, and measurement. This indicates that family business definition is not a matter of concern for researchers, but rather a matter of convenience.

scholarly journals The Effect of Capital Adequacy on Credit Risk Management among Commercial Banks in Nigeria; Within the Basel Capital Adequacy Framework

2019 ◽  
Vol 10 (07) ◽  
Author(s):  
Dr. S.L.C. Adamgbo ◽  
Prof. A. J. Toby ◽  
Dr. A.A. Momodu ◽  
Prof. J.C. Imegi
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Management Practices ◽  
Time Series Data ◽  
Capital Adequacy ◽  
Series Data ◽  
Basel Iii ◽  
Credit Risk Management ◽  
Tier I

This study analyses the effects of capital adequacy measures on credit risk management practices in Nigeria. The study applies the quasi experimental research design. The secondary time series data were obtained from annual report of the fifteen (15) quoted commercial banks in Nigeria as compiled in the Nigeria Stock Exchange Fact book for the period 1989 to 2015. The dependent variable; credit risk was modelled with the five (5) variants of capital adequacy measures as prescribed in Basel III provisions as our dependent variables. The independent variables were categorized under Tier I, Tier II, capital to total assets, capital conservation Buffer (CCB), Minimum Total capital Ratio (MTC) and counter cyclical capital Buffer (CCyB). The multivariate regression technique was specified and results obtained based on E-views version 9.0. The unit root result shows that the variables were stationary at levels in all except MTC which was stationary at first difference. The conintegration result shows existence of a long run equilibrium relationship between credit risk and capital adequacy. The VAR result shows that changes in credit risk were statistically and significantly influenced by capital adequacy measures. The bi-variate causality test unveils that credit risk granger-causes Tier I, capital to total risk assets, hence there exist a bidirectional link between credit risk and capital adequacy (CCB) though credit risk granger-cause more. The Impulse Response Function result shows that credit risk responded normally and negatively to the selected capital adequacy measures except for MTC ratio. The variance decomposition result unveils that credit risk accounted for own shocks up to 79.30%, this points to the critical nature of credit risk to bank survival and growth. This study concludes that transition from Basel II to Basel III will further mitigate risk management under Basel III capital framework and will also avert systemic failure in banks in Nigeria. It is recommended that risk management should be a matter of policy focus and priority among regulators and operators of bank in Nigeria.

Sign in / Sign up

Export Citation Format

Share Document