Determinants of capital adequacy ratio in Kuwaiti banks

The aim of this study is to identify the effects of seven internal factors of five conventional Kuwaiti banks on capital adequacy ratio (CAR). The five factors are: Loans to Assets, Loans to Deposits, Non-Performing Loans to Total Loans, Return on Assets, Return on Equity, Dividend Payout and Total Liability to Total Assets. The study covers the period from 2005 to 2013. The study shows that under fixed effect model, variables DIVIEDEND, LAR, LDR, NPLLR, and ROE do not have any impact on capital adequacy ratio. However, SIZE has a significant and negative relationship with capital adequacy ratio. Also, ROA shows a significant and negative relationship with capital adequacy ratio. Under random effect model, results indicate that CAR is adversely affected by bank’s SIZE (total liability to assets), and ROA has a significant and negative relationship with capital adequacy ratio, However, Loan to Deposit Ratio (LDR) showed a significant and positive relationship with capital adequacy ratio. On the other hand, dividend payout, loans to assets, Non-Performing Loans to Total Loans and Return on equity do not have significant effect on CAR under random effect model.

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Financial Determinants of Qardhul Hasan Financing Growth: Evidence from Islamic Banks in Indonesia

Global Review of Islamic Economics and Business ◽

10.14421/grieb.2015.031-03 ◽

2016 ◽

Vol 3 (1) ◽

pp. 038

Author(s):

Agus Saur Utomo ◽

Novita Kusuma Maharani ◽

Danes Quirira Octavio

Keyword(s):

Random Effect ◽

Random Effect Model ◽

Fixed Effect Model ◽

Capital Adequacy ◽

Financial Ratios ◽

Return On Equity ◽

Net Interest Margin ◽

Effect Model ◽

Capital Adequacy Ratio ◽

Interest Margin

The purpose of this paper is to investigate the financial factors that determine the growth of qardhul hasan financing in the sharia banks in Indonesia. We employ financial ratios such as Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Net Interest Margin (NIM), Operational Cost to Operational Income (BOPO), Return on Asset (ROA) and Return on Equity (ROE) to explain the growth of qardhul hasan during 2011 to 2014. This paper utilizes the fixed effect model and the random effect model to provide empirical evidences. The empirical result demonstrates that Non-Performing Financing (NPF), Net Interest Margin (NIM), Return on Asset (ROA) and BOPO have significance relationship to the qardhul hasan financing. The finding shows that the growth of qardhul hasan financing in sharia banks is influenced by financial ratios of NIM, NPF, BOPO and ROA. This finding adds important evidence to the existing research on qardhul hasan financing in sharia banks.

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PENGARUH KINERJA KEUANGAN DAN EFISIENSI TERHADAP RATE OF RETURN SIMPANAN MUDHARABAH BANK UMUM SYARIAH

Jurnal Ekonomi Syariah Teori dan Terapan ◽

10.20473/vol8iss20211pp1-7 ◽

2021 ◽

Vol 8 (1) ◽

pp. 1

Author(s):

Rifka Mifta Aulia ◽

Lina Nugraha Rani

Keyword(s):

Random Effect ◽

Random Effect Model ◽

Capital Adequacy ◽

Rate Of Return ◽

Return On Equity ◽

Islamic Bank ◽

Net Interest Margin ◽

Effect Model ◽

Capital Adequacy Ratio ◽

Interest Margin

ABSTRAKPenelitian ini bertujuan untuk mengetahui pengaruh Financial Performance Return on Asset (ROA), Return on Equity (ROE), Financing to Deposit Ratio (FDR), Giro Wajib Minimum (GWM), Biaya Operasional terhadap Pendapatan Operasional (BOPO), Net Interest Margin (NIM), dan Capital Adequacy Ratio (CAR) terhadap Rate of Return (ROR) Bank Syariah. Random Effect Model (REM) digunakan dalam penelitian ini untuk menguji hubungan variabel independen terhadap variabel dependen, baik secara parsial maupun simultan. Hasil penelitian menunjukkan bahwa Return on Assets (ROA), Return on Equity (ROE), dan Net Interest Margin (NIM) berpengaruh positif dan signifikan terhadap Rate of Return (ROR) Bank Syariah. Sedangkan Capital Adequacy Ratio (CAR) berpengaruh negatif dan signifikan terhadap Rate of Return (ROR) Bank Syariah. Variabel FDR, GWM, dan Efisiensi Operasional serta Rasio Efisiensi Biaya tidak berpengaruh terhadap Rate of Return (ROR) Bank Syariah. Hal ini dipertimbangkan Bank Islam dapat meningkatkan rasio ROE, sehingga dapat meningkatkan modal untuk efektivitas tingkat pengembalian, dan membuat rasio Net Interest Margin menjadi lebih efisien.Kata kunci: ROA, ROE, FDR, GWM, BOPO, NIM, CAR, Bank Umum Syariah, Rate of Return. ABSTRACTThis study aims to determine the effect of Financial Performance Return on Asset (ROA), Return on Equity (ROE), Financing to Deposit Ratio (FDR), Minimum Statutory Reserves (GWM), Operating Costs to Operating Income (BOPO), Net Interest Margin (NIM), and Capital Adequacy Ratio (CAR) on the Rate of Return (ROR) of Islamic Bank. Random Effect Model (REM) is used in this study to examine the relationship of independent variables to the dependent variable, both partially and simultaneously. The finding shows that Return on Assets (ROA), Return on Equity (ROE), and Net Interest Margin (NIM) have positive and significant effect on the Rate of Return (ROR) of Islamic Bank. Meanwhile, Capital Adequacy Ratio (CAR) has negative and significant effect on the Rate of Return (ROR) of Islamic Bank. Financing to Deposit Ratio (FDR), Reserve Requirement (GWM), and Operational Efficiency and Cost Efficiency Ratio variables have no effect on the Rate of Return (ROR) of Islamic Bank. This considered for the Islamic Bank to increase the ROE ratio, thus it can increase capital for the effectiveness of the rate of return, and make the Net Interest Margin ratio more efficient.Keyword: ROA, ROE, FDR, GWM, BOPO, NIM, CAR, Islamic Commercial Banks, Rate of Return.

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Effect of Dividend on Stock Price: A Case of Fuel and Power Industries in Bangladesh

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v9i2.14715 ◽

2019 ◽

Vol 9 (2) ◽

pp. 87

Author(s):

Mir Md Nazrul Islam

Keyword(s):

Stock Price ◽

Dividend Policy ◽

Random Effect ◽

Random Effect Model ◽

Fixed Effect Model ◽

Fixed Effect ◽

Return On Equity ◽

Share Prices ◽

Earnings Per Share ◽

Effect Model

Dividend policy is an extensively researched topic in the arena of investments but still it remains an enigmatic that whether Dividend Policy affects the Stock Prices or not. The consequences of researches conducted in different stock markets are different. In Bangladesh, capital market investment is very essential and significant for the growth and market capitalization of domestic industry, trade and commerce. In current years Bangladesh had faced many precarious situations in its stock market. The Stock price reactions to the declaration of dividend of the fuel and power industry of Bangladesh are empirically examined. This study examines stock price reactions of listed dividend paying fuel and power industries in Dhaka stock exchange, Bangladesh for period of 11 years from of 2008-2018. This study will help us to make effective dividend decisions and effective implementation of dividend policies. In this study, Fixed Effect Model along with Random Effect Model have been used to estimate results. Both Models are implemented on panel data for explaining the association between dividend payments and share prices while controlling logarithm value of Profit after Tax, Earnings per Share and Return on Equity. The research is accompanied with a view to find whether the dividend announcement convey any evidence to the market that results a stock price volatility for adjusting the dividend announcement information while controlling the variables like Profit After Tax Earnings, Per Share and Return on Equity. The study also tested both the Models and found Random Effect Model is more significant than Fixed Effect Model. The result documented on the Random Effect Model shows that there are significant relationship with Retention Ratio, dividend per share and Return on Equity. In addition, Profit after tax shows the negative significant association and Earning per Shares insignificant with the share prices in Bangladesh Fuel and Power sector.

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Performance of Banks in Pakistan based on determinants of Profitability

Journal of Business & Tourism ◽

10.34260/jbt.v2i2.49 ◽

2021 ◽

Vol 2 (2) ◽

pp. 139-148

Author(s):

AQSA SIDDIQ ◽

KHURSHEED IQBAL ◽

SHAMS UR REHMAN

Keyword(s):

Banking Sector ◽

Random Effect ◽

Random Effect Model ◽

Fixed Effect Model ◽

Positive Influence ◽

Strategic Decision ◽

Return On Assets ◽

Return On Equity ◽

Effect Model ◽

Main Determinants

The study aims to seek the internal factors that affect the profitability of banks in Pakistan from a period of 2009 to 2013 by using two proxies i.e. Return on Assets (ROA) and Return on Equity (ROE). The panel data of fifteen banks have been obtained from the financial statements of the banks. Therefore, Hausman test has verified that random effect model is most appropriate model for Return on Assets (ROA), conversely fixed effect model is prominent for Return on Equity (ROE) for the current study. The empirical results confirm that investment to total assets, leverage, Net Performing Loan (NPL) to gross advances, capital ratio and total deposits to total equity are the main determinants of profitability across both proxies (i.e. ROA and ROE). Leverage and capital ratio have significantly negative, however net performing loan to gross advance and total deposit to total equity have significantly positive influence on profitability of banks across both models. Moreover, NPL to gross advance is insignificant determinant of Return on Equity. The results are worthy for bankers and all stakeholders to make strategic decision for the competitiveness of banking sector in Pakistan.

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Faktor-Faktor Yang Mempengaruhi Capital Adequacy Ratio (CAR) Bank Umum Syariah di Indonesia

Jurnal Ekonomi Syariah Teori dan Terapan ◽

10.20473/vol4iss20174pp312-323 ◽

2017 ◽

Vol 4 (4) ◽

pp. 312

Author(s):

Yeano Dwi Andhika ◽

Noven Suprayogi

Keyword(s):

Fixed Effect Model ◽

Capital Adequacy ◽

Islamic Banks ◽

Estimation Model ◽

Return On Equity ◽

Effect Model ◽

Panel Data Regression ◽

Capital Adequacy Ratio ◽

Data Regression ◽

Level Of Significance

Capital adequacy regulation imposed on banks, including Islamic banks, is part of the regulators’ efforts to ensure that banks have adequate capital in order to get them prepared facing the risks that might arise in their operations. This research aims to find the effects of Islamic banks’ specific variables on Capital Adequacy Ratio (CAR), the capital adequacy indicator in banks.Using panel data regression, this research investigates the possible effects of four bank spesific variables which are Bank Size (LNSIZE), Non-Performing Financing (NPF), Return on Equity (ROE), and Financing to Deposit Ratio (FDR) on Capital Adequacy Ratio (CAR). There are 11 Indonesia’s Islamic commercial banks during 2011 to 2015 used as sample. As Fixed Effect Model (FEM) chosen to be the estimation model, this research indicates that LNSIZE, NPF, ROE and FDR have significant effects on CAR with different level of significance.

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Pengaruh Profitabilitas, Leverage, dan Growth Terhadap Kebijakan Deviden Pada Perusahaan Property, Real Estate, and Building Contruction yang Terdaftar di Bursa Efek Indonesia

Jurnal Benefita ◽

10.22216/jbe.v4i3.3938 ◽

2019 ◽

Vol 4 (3) ◽

pp. 399

Author(s):

Afriyeni Afriyeni ◽

Kartika Deas

Keyword(s):

Panel Data ◽

Real Estate ◽

Random Effect ◽

Random Effect Model ◽

Fixed Effect Model ◽

Dividend Payout ◽

Common Effect ◽

Effect Model ◽

Equity Ratio ◽

Asset Growth

The purpose of this research is to test the influence of Profitability variable by using Return On Asset (ROA), Leverage by using Debt to Equity Ratio (DER), and Growth variable by using Asset Growth (AG), to the Dividend Payout Ratio (DPR) on companies Property, Real Estate, and Building Construction are listed in Indonesian Stock Exchange in 2013-2017 periods. In this research, the data used was obtained from the official IDX website. This research was included in explanatory research using a quantitative approach. The data analysis method used is regression analysis in panel data with the help of application E-Views 8. Panel data regression can be estimated using three models, namely Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). From the result of the estimation model, it is found that REM is the best model in this study. The result showed that the profitability has a positive and significant effect on Dividend Payout Ratio, Leverage has a positive and significant effect on Dividend Payout Ratio, while Growth has a negative and hasn’t significant effect on Dividend Payout Ratio<div> </div><div>Tujuan dari penelitian ini adalah untuk menguji pengaruh variabel Profitabilitas dengan menggunakan Return On Asset (ROA), Leverage dengan menggunakan Debt to Equity Ratio (DER), dan variabel Growth dengan menggunakan Asset Growth (AG), terhadap Kebijakan Deviden dengan menggunakan Dividend Payout Ratio (DPR) pada perusahaan Property, Real Estate, and Building Contruction terdaftar di Bursa Efek Indonesia pada periode 2013-2017. Dalam penelitian ini data yang digunakan diperoleh dari situs web resmi BEI. Penelitian ini termasuk dalam penelitian penjelasan dengan menggunakan pendekatan kuantitatif. Metode analisis data yang digunakan adalah analisis regresi data panel dengan bantuan aplikasi E-Views 8. Data panel regresi dapat diperkirakan menggunakan tiga model, yaitu Common Effect Model (CEM), Fixed Effect Model (FEM), dan Random Effect Model ( REM). Dari hasil model estimasi, ditemukan bahwa REM adalah model terbaik dalam penelitian ini. Hasil penelitian menunjukkan bahwa profitabilitas berpengaruh positif dan signifikan terhadap Kebijakan Deviden, leverage berpengaruh positif dan signifikan terhadap Kebijakan Deviden, sedangkan pertumbuhan berpengaruh negatif dan tidak signifikan terhadap Kebijakan Deviden</div>

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PENGARUH PROFITABILITAS TERHADAP KEBIJAKAN DIVIDEN DENGAN ANALISA DATA PANEL PADA MULTI-BISNIS DI BURSA EFEK INDONESIA PERIODE 2007-2017

Jurnal Apresiasi Ekonomi ◽

10.31846/jae.v8i1.261 ◽

2020 ◽

Vol 8 (1) ◽

pp. 15-27

Author(s):

Jan Horas Veryady Purba

Keyword(s):

Panel Data ◽

Dividend Policy ◽

Stock Exchange ◽

Panel Data Analysis ◽

Random Effect ◽

Random Effect Model ◽

Fixed Effect Model ◽

Fixed Effect ◽

Dividend Payout ◽

Effect Model

The issue of dividends is very important to show the prospects for the company's growth in the future, and also important in the company's capital structure. Dividend policy can be influenced by profitability and other variables. In this study, profitability is chosen due to its role as main indicator that shows the company's capacity to pay dividends. This study aims to analyze the effect of profitability on dividend policy. The study population is a company listed on the Indonesia Stock Exchange. Purposively selected eight companies that have a good liquidity category. Data for each company is taken from 2007 to 2017. With this data structure, the analysis used is panel data regression analysis. Panel data analysis models include the Common Effect Model (CEM) Fixed Effect Model (FEM) and Random Effect Model (REM). The best model was tested with the Chow test and Hausman Test and obtained The Fixed Effect Model. Dividend policy is measured by the variable dividend payout ratio. The findings in this study conclude that the dividend policy (Dividend Payout Ratio) is influenced by ROE, EPS and NPM, where these independent variables have a positive and significant influence on DPR.

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Determinant of sharia banks profitability in Indonesia: The moderating effect of non performing financing

Jurnal Kajian Manajemen Bisnis ◽

10.24036/jkmb.11245700 ◽

2021 ◽

Vol 10 (1) ◽

pp. 70

Author(s):

Darmawati Muchtar ◽

Fahmi Azhari ◽

Iswadi Bensaadi

Keyword(s):

Random Effect ◽

Random Effect Model ◽

Operating Cost ◽

Analysis Data ◽

Capital Adequacy ◽

Operating Income ◽

Effect Model ◽

Capital Adequacy Ratio ◽

Negative Effect

This study aims to analyze the effect of capital adequacy ratio (CAR), operating cost of operating income (BOPO) on profitability and examine the role of non performing financing (NPF) in influencing the relationship between CAR and BOPO on profitability of sharia bank in Indonesia. The data used in this study is a panel data that consisting of 10 sharia banks for the period 2010-2018 with 99 observations. The method of analysis data is multiple regression analysis with random effect model. The results of this study in model one show that BOPO has negative and significantly affects profitability, meanwhile CAR has positive but insignificant effect, while and NPF has negative effect on profitability but insignificant in model two. Furthermore, when NPF interected with CAR shows interesting results, in which CAR has negative and significant effect on profitability, while BOPO is still consistent with negative and significant effect on profitability. This suggests that the NPF moderates the influence of CAR and BOPO on profitability. This implies that increase NPF would decrease the effect of CAR on profitability and the effect of BOPO on profitability would be strangted of syaria bank in Indonesia. Keywords: Capital adequacy ratio; BOPO; non performing financing, profitability

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What Determines the Financial Performance of Islamic Banks in Indonesia?

Journal of Islamic Economics and Finance ◽

10.22373/share.v10i2.9164 ◽

2021 ◽

Vol 10 (2) ◽

pp. 195

Author(s):

Early Ridho Kismawadi ◽

Abdul Hamid ◽

Rasydah Rasydah ◽

Aigatama Rafida

Keyword(s):

Financial Performance ◽

Random Effect ◽

Random Effect Model ◽

T Test ◽

Capital Adequacy ◽

Islamic Banks ◽

F Test ◽

Effect Model ◽

Panel Data Regression ◽

Capital Adequacy Ratio

This study aims to determine the effect of the Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), and Operational Efficiency Ratio (OER) at Islamic Commercial Banks in Indonesia for the 2010-2019 period. The test was carried out using panel data regression with the Random Effect Model (REM) model, tested using the t-test and f test with a significance of 5%. Based on the results of the t-test, partially, OER has a negative and significant effect on Return on Assets (ROA), whilst NPF and CAR do not significantly affect ROA. Moreover, the results of the F-test show that CAR, NPF, and OER simultaneously affect ROA. The results of this study indicate that to maximize the financial performance of Islamic banking in Indonesia, the Islamic banks must pay attention to the OER variable.==========================================================================================================ABSTRACT - Determinan Apa yang Mempengaruhi Kinerja Keuangan Bank Syariah di Indonesia? Penelitian ini bertujuan untuk menganalisis pengaruh Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), dan Beban Operasional terhadap Pendapatan Operasional (BOPO) pada Bank Umum Syariah di Indonesia periode 2010-2019. Pengujian dilakukan menggunakan regresi data panel dengan model Random Effect Model (REM) yang pengujiannya menggunakan uji t dan uji f dengan signifikansi yaitu 5%. Berdasarkan hasil uji t, secara parsial BOPO berpengaruh negatif dan signifikan terhadap Return on Asset (ROA), sedangkan variabel NPF dan CAR tidak memiliki pengaruh yang signifikan terhadap ROA. Selanjutnya, hasil uji F menunjukkan bahwa CAR, NPF, dan BOPO secara simultan berpengaruh terhadap ROA. Hasil penelitian ini memberikan rekomendasi kepada Bank Syariah di Indonesia agar memberikan perhatian yang lebih serius terhadap variabel BOPO jika ingin memaksimalkan kinerja keuangannya..

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