scholarly journals Credit Risk and Shareholders’ Value in a Developing Economy: Evidence from Pakistani Banking System

2012 ◽  
Vol 4 (2) ◽  
pp. 87-95
Author(s):  
Ahmed Arif ◽  
Mohammad Afzal .
Keyword(s):  
Credit Risk ◽  
Value Creation ◽  
Panel Data Analysis ◽  
Banking System ◽  
Capital Adequacy ◽  
Loan Loss ◽  
Creation Process ◽  
The Impact ◽  
Value Creation Process

The present study examines the role of credit risk in value creation process in banking system of Pakistan. This study here develops a conceptual model with three antecedents to credit risk. These antecedents are loan loss provision, advances, and capital adequacy ratio. The study analyzes the impact of these antecedents on accounting return on equity (ROE) and market return on shares (ROS). The data come from 20 banks listed on Karachi Stock Exchange (KSE) for 2004-2009. The study includes panel data analysis to analyze the relationship between the selected variables. The results of this study expose a minimal role of credit risk in value creation process in banking system of Pakistan. The results further reveal that banks with higher advances in their portfolio are successful in getting the confidence of shareholders.

scholarly journals Differences in Disclosure of Integrated Reports at Energy and Non-Energy Companies

Energies ◽  
2021 ◽  
Vol 14 (5) ◽  
pp. 1253
Author(s):  
Maja Piesiewicz ◽  
Marlena Ciechan-Kujawa ◽  
Paweł Kufel
Keyword(s):  
Ownership Structure ◽  
Value Creation ◽  
Energy Sector ◽  
Financial Data ◽  
Integrated Reporting ◽  
Creation Process ◽  
And Performance ◽  
Energy Companies ◽  
The Impact ◽  
Value Creation Process

Integrated reports combine financial and non-financial data into a comprehensive report outlining the company’s value creation process. Our objective is to find the completeness of disclosures, which is a crucial aspect of an integrated report’s quality. This study contributes to the integrated reporting examination by identifying quantitative and qualitative gaps when applying Integrated Reporting standards, focusing on the energy sector. We conducted the study on 57 published integrated reports of listed companies in Poland. The content of each report was examined for 49 features divided into eight areas. We identify the strengths and weaknesses of current reporting performance and the impact of the company’s sector on reports’ quality. We noted that there are significant differences among the areas. The major problems concern implementing IIRC’s framework on the connections between the business model and the organization’s strategy, risks, opportunities, and performance. Our research also noted that the level of specific disclosures might be related to a company’s ownership structure. We investigated the significance of differences among companies from the energy and non-energy sectors using statistical methods. As a result of the study, we obtained that disclosures’ completeness depends on the operation sector. The companies in the energy sector publish higher-quality integrated reports than companies in the other sectors.

Determinants of loan losses of Indian Banks: a panel study

2015 ◽  
Vol 9 (1) ◽  
pp. 17-32 ◽  
Author(s):  
Satyajit Dhar ◽  
Avijit Bakshi
Keyword(s):  
Public Sector ◽  
Panel Data Analysis ◽  
Capital Adequacy ◽  
Content Type ◽  
Specific Factors ◽  
Indian Banks ◽  
Loan Losses ◽  
The Impact ◽  
Bank Specific Factors

Purpose – The purpose of this paper is to examine the factors that influence the variability of loan losses (termed as non-performing advances or NPA in India) of Indian banks in the public sector during the period of five years from 2001 to 2005. Design/methodology/approach – The analysis is based on a panel approach, which considers both spatial and time dimensions of observations. Panel regression was used to explore the impact of different bank-specific factors on NPAs of 27 public sector banks (PSBs). Standard tests were used to find out suitability of different models of panel data analysis. Eight bank-specific factors were identified for analysis on the basis of review of extant literature. Findings – Certain bank-specific factors, in particular, net interest margin and capital adequacy ratio exhibit negative and significant impact on gross non-performing advances (GNPA) ratio of Indian PSBs. The results also suggest that relative quantum of sensitive sector (SEN) (comprised of commercial real estate, commodity and capital market) advances has a positive relationship with NPA ratio, and such a relationship is statistically significant. Research limitations/implications – The sample is restricted to India and may not be reflective of other countries. The study considers bank-level factors, and there are some macro factors (e.g. gross domestic product, interest rate and inflation rate) which could have explained the variability of GNPA ratio. Practical implications – Provisioning against loan losses is a major issue for stability of the banking system. Identification of appropriate causes of variability of such loan losses is important for managing credit portfolio of a bank. A positive and significant relationship between SEN advances and NPA calls for a more cautionary approach toward lending to those sectors. Originality/value – This paper is believed to be the first attempt to empirically examine the role of bank-specific factors. This study attempts to enrich empirical research in the field and provides an insight into the role of various bank-specific factors on loan losses in the context of Indian PSBs. The study provides contrary evidence regarding the role of priority sector advances on a GNPA ratio.

scholarly journals The Impact of Market Discipline on Banks’ Capital Adequacy: Evidence From an Emerging Economy

2015 ◽  
Vol 4 (1) ◽  
pp. 61-73 ◽  
Author(s):  
Ayesha Afzal
Keyword(s):  
Perceived Risk ◽  
Banking System ◽  
Empirical Support ◽  
Market Discipline ◽  
Capital Adequacy ◽  
Risk Level ◽  
Bank Capital ◽  
The Cost ◽  
The Impact

This study presents empirical support for the role of market discipline in augmenting bank capital ratios in a competitive banking environment. Using a panel dataset on domestic commercial banks in Pakistan from 2009 to 2014, the study determines if the market penalized banks for any increase in their risk profile through a rise in the cost of raising funds. The results point to a significant relationship between capital adequacy and other risk factors, with the cost of deposits demonstrating how depositors align the required return to the perceived risk level of the bank. These findings have important implications for policymakers as market discipline could complement the role of regulators, which would eventually lower the cost of supervision. Moreover, the focus of international reforms as seen through the implementation of Basel III should continue to be on developing a more competitive and transparent banking system.

The value space: how firms facilitate value creation

2016 ◽  
Vol 22 (4) ◽  
pp. 736-762 ◽  
Author(s):  
Martti Lindman ◽  
Kyösti Pennanen ◽  
Jens Rothenstein ◽  
Barbara Scozzi ◽  
Zsuzsanna Vincze
Keyword(s):  
Value Creation ◽  
Process Management ◽  
Content Type ◽  
Creation Process ◽  
A Value ◽  
Multiple Case ◽  
Different Dimensions ◽  
Value Creation Process

Purpose – The purpose of this paper is to investigate the firm’s role in the value creation process. In particular, after categorizing the activities that firms carry out to facilitate the creation of value, the “value space,” an actionable framework within which different dimensions of value creation are integrated, is developed and discussed. Design/methodology/approach – The framework is built up on process theory, an in-depth review of the literature and a multiple case study carried out on 65 European firms in the furniture industry. Findings – The value space is both a practical and theoretically based framework which contributes to the development of a more holistic and “actionable” view on the role of firm in the value creation process; also it provides managers with a tool to support the analysis, management and innovation of the value creation process. Originality/value – The systematic categorization of firms’ activities and their subsequent integration into a value creation framework are a missing piece in terms of understanding the value creation process carried out by firms. Also, by facilitating the analysis and innovation of the value creation process, the framework can be used to support both exploitative and explorative business process management.

Schumpeterian Customers? How Active Users Co-create Innovations

2018 ◽  
Author(s):  
Gernot Grabher ◽  
Oliver Ibert
Keyword(s):  
Economic Geography ◽  
Value Creation ◽  
Value Chain ◽  
New Paradigm ◽  
Creation Process ◽  
Value Creation Process ◽  
Innovation Processes

Up until recently, the role of the customer in economic geography seems to have been confined to a passive recipient of products at the end of the value chain. Innovation, in particular, has been conceived as an affair within and between firms. More recently, however, this traditional perception has been challenged. Consumers, in fact, are no longer seen as mere buyers of commodities but are more and more perceived (and perceive themselves) as competent users who contribute valuable knowledge to innovation processes and who have the power and capacity to intervene at all stages in the value creation process. Value co-creation has emerged as a new paradigm that signifies this transformation of the role of consumers. The prime aim of this chapter is to map out the evolving terrain of value co-creation and to draw conclusions for economic geographical inquiry into innovation processes.

scholarly journals Entrepreneurial value creation: conceptualizing an exchange-based view of entrepreneurship

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michele Pinelli ◽  
Christian Lechner ◽  
Sascha Kraus ◽  
Eric Liguori
Keyword(s):  
Value Creation ◽  
Design Methodology ◽  
Opportunity Recognition ◽  
Exchange Relationships ◽  
Content Type ◽  
Creation Process ◽  
Marketing Literature ◽  
Value Creation Process

PurposeThis paper proposes an Exchange-Based View of the value creation process. The Borrowing from marketing literature, the EBV advances that entrepreneurs and stakeholders are tied by exchange relationships, through which they co-create value by reciprocally making and realizing promises of value.Design/methodology/approachPropositions are developed and offered to advance the role of exchange in the entrepreneurial value creation process.FindingsThe authors conceptualize the enterprise as a system of exchange relationships between entrepreneurs and their stakeholders, thus proposing an exchange-based view of entrepreneurship.Originality/valueSuch an account of the role of entrepreneurs and of their relationship with the stakeholders has meaningful implications for our understanding of the entrepreneurial tasks of opportunity recognition and exploitation.

scholarly journals The Impact of Credit Risk Management on the Profitability of a Commercial Bank: The Case of BGFI Bank Congo

2020 ◽  
Vol 12 (3) ◽  
pp. 21
Author(s):  
Ossou Ndzila Fred Nelson
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Negative Impact ◽  
Capital Adequacy ◽  
Risk Indicators ◽  
Positive Contribution ◽  
Credit Risk Management ◽  
Loan Loss ◽  
Management Indicators ◽  
The Impact

This study examines the impact of credit risk management on the profitability of BGFI Bank Congo, by identifying credit risk indicators and profitability measurement ratios over the period of 2010-2019. The results indicate that profitability is somewhat affected by credit risk management as measured by its credit risk management indicators. The non-performing loan ratio (NPLR), the capital assets ratio (CAR), and the loan loss provision ratio (LLPR) show a negative impact on ROE. These three ratios contribute negatively, while the CAR makes a positive contribution to Return on assets (ROA) and the ratio of client loans and short-term financing (RCLSTF) on return on equity (ROE). Thus, credit risk management has a significant impact on profitability. The study also shows that other selected credit risk management indicators have a significant impact on the Bank's profitability, such as the loan provision ratio (LLPR) and the clean capital adequacy ratio.

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