Bad Debt and Cost Efficiency in Vietnamese Commercial Banks

2015 ◽  
Vol 22 (1) ◽  
pp. 125-140
Author(s):  
NGUYEN THI HONG VINH
Keyword(s):  
Cost Efficiency ◽  
Commercial Banks ◽  
Bad Debt

scholarly journals Bad Debt and Cost Efficiency in Vietnamese Commercial Banks

2015 ◽  
Vol 22 (1) ◽  
pp. 125-140
Author(s):  
Vinh Nguyen Thi Hong
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Direct Relationship ◽  
Data Envelopment ◽  
Dea Method ◽  
Two Stages ◽  
The Cost ◽  
The Relationship ◽  
Bad Debt

The paper aims at exploring the relationship between bad debt and cost efficiency in Vietnamese commercial banks in the years 2007 – 2013. The research includes two stages: (i) Measuring the cost efficiency of banks by non-parameter Data Envelopment Analysis (DEA) method suggested by Coelli (2005); and (ii) Applying the Tobit model to identify two-way effects of bad debt and bank cost efficiency. The results show that the cost efficiency in Vietnamese commercial banks is 52.6% and there exists a direct relationship between bad debt and cost efficiency.

scholarly journals Cost efficiency of the Czech and Slovak banking sectors: an application of the data envelopment analysis

2016 ◽  
Author(s):  
Iveta Palecková
Keyword(s):  
Data Envelopment Analysis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Returns To Scale ◽  
Data Envelopment ◽  
Cost Efficient ◽  
The Cost ◽  
Variable Returns To Scale

The aim of the paper is to estimate the cost efficiency of the Czech and Slovak commercial banks within the period 2010-2014. For empirical analysis the Data Envelopment Analysis input-oriented model with variable returns to scale is applied on the data of the commercial banks. The intermediation approach is adopted to define the inputs and outputs. The Czech commercial banks are more cost efficient than Slovak commercial banks. The development of average cost efficiency is similar in the Czech and Slovak banking industry. The most efficient Czech banks are Ceská sporitelna and Sberbank in the Czech banking sector, the most efficient Slovak bank is Privatbanka with 100% efficiency.

Efficiency of Thai Commercial Banks: Pre- vs. Post-1997 Financial Crisis

2010 ◽  
Vol 13 (03) ◽  
pp. 417-447 ◽  
Author(s):  
Pornchai Chunhachinda ◽  
Li Li
Keyword(s):  
Growth Rate ◽  
Financial Crisis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Gdp Growth ◽  
Crisis Period ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Cost Efficiencies ◽  
Financial Characteristics

This study measures and compares the profit and cost efficiencies of Thai commercial banks between 1990 and 2008 which has been subdivided into the pre-crisis, the financial crisis, and the post-crisis periods. The efficiency scores are measured using a combination of parametric and non-parametric frontier approach. Both average profit and cost efficiency levels of the post-crisis period are found to be significantly lower than those of the pre-crisis period. The evidence also indicates that the real GDP growth rate and some general and financial characteristics are correlated with the efficiency level of Thai commercial banks.

scholarly journals Are Cooperative Banks Better Equipped to Weather Financial Crisis than their Commercial Counterparts? Evidence from the Italian Banking Sector before and during the Credit Crisis

Organizacija ◽  
2016 ◽  
Vol 49 (2) ◽  
pp. 108-126
Author(s):  
Mitja Stefancic
Keyword(s):  
Financial Crisis ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Banking Sector ◽  
Policy Implications ◽  
Business Strategies ◽  
Economic Downturn ◽  
Credit Crisis ◽  
Cooperative Banks

Abstract Background and Purpose: The aim of this paper is to empirically investigate the performance of different types of Italian banks before and during the recent credit crisis with an emphasis on the behaviour of cooperative banks. It is well established in theory that cooperative banks follow more conservative business strategies and care more for stakeholders in comparison to commercial banks. On this background, the paper tries to show the empirical effects of those characteristics on the cooperative bank’s performance during financial distress compared to commercial banks. In fact, the paper can prove that Italian cooperative banks were less exposed to the shocks of the crisis and showed a better performance. Methodology: In order to assess whether cooperative banks performed differently at all from commercial banks during the 2005-2012 period, return on average assets (ROAA), cost efficiency and loan quality have been investigated by means of a sample of 594 Italian banks, pooled OLS and (when possible) a fixed effects estimator. Results: Overall, Italian cooperative banks performed better than other Italian banks during the financial crisis. The quality of loans deteriorated less in these banks than in others, while no significant differences have been observed in terms of ROAA and cost efficiency between these and other banks. Conclusion: My paper provides empirical evidence for a well established theoretically derived hypothesis: Italian cooperative banks operate differently than standard commercial banks which is especially noticeable during times of crisis. The fact empirically demonstrated that different banking models have shown different reactions to the financial crisis and economic downturn has important policy implications. Due to both characteristics of cooperative banks and severe limitations in the financial policies by the Italian government during the credit crisis an ironical pattern has emerged: While Italian cooperative banks were less exposed to the shocks of the crisis, they would have been less able to adjust to them since the financial rescue program was designed primarily for commercial banks.

scholarly journals Penerapan Strategi Cost Efficiency (Efisiensi Biaya) Pada PT Bank Muamalat Indonesia, Tbk. Tahun 2017

2019 ◽  
Vol 1 (1) ◽  
pp. 37-44
Author(s):  
Nidaul Izzah ◽  
Muhammad Zakaria Rachmawan
Keyword(s):  
Cost Efficiency ◽  
Commercial Banks ◽  
Financial Ratios ◽  
Operating Costs ◽  
Bank Performance ◽  
Operating Income ◽  
The Cost

This research discusses about the implementation of the cost efficiency strategy at PT Bank Muamalat Indonesia, Tbk. As for the phenomenon of the problem that the authors observe on the financial ratios report of PT Bank Muamalat Indonesia, Tbk., especially in the BOPO ratio (Operating Costs to Operating Income), it ranks fourth highest out of a total of 13 Islamic Commercial Banks in Indonesia. Based on the authors’ observation, it has implemented the cost efficiency strategy that is also carried out by banks in general. However, there are some obstacles that result in inefficient bank performance, so the BOPO ratio is still high. Therefore, PT Bank Muamalat Indonesia, Tbk. has made several solutions to overcome the obstacles faced.

scholarly journals Reality of Vietnam’s Commercial Bank Performance and Soundness

2015 ◽  
Vol 22 (02) ◽  
pp. 48-69
Author(s):  
Canh Nguyen Thi ◽  
Hien Nguyen Thi Diem
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Financial Statements ◽  
Equity Capital ◽  
Rating System ◽  
Bank Performance ◽  
Return On Assets ◽  
Banking Efficiency ◽  
Return On Equity ◽  
Bad Debt

This paper employs CAMELS rating system to evaluate the performance and soundness of Vietnam’s commercial banks. Based on the analysis of data from financial statements of the banks in the years 2005/2008–2013, the research results show that the total assets and equity capital of Vietnam’s commercial banks have increased, but their efficiency is not yet high and tends to gradually decrease. The expense-to-revenue ratio was higher than 80% while the return on assets (ROA) ratio remained around 1% and had a tendency to sharply fall to 0.77% and 0.56% in 2012 and 2013 respectively. The return on equity (ROE) ratio, in addition, fell steadily in 2012 (7.42%) and 2013 (5.84%). The findings also indicate that profitability of state-owned commercial banks is higher than that of private joint-stock ones. Additionally, risk degree was high because of a high bad debt (around 4%) and low liquidity (around 90% of loan-to-deposit ratio). In addition to its analysis, the research offers sevaral recommendations that aim at improving banking efficiency and mitigating risk as for Vietnam’s commercial banks.

scholarly journals Determinants of banks’ cost efficiency: a case study of selected commercial banks, Ethiopia

2020 ◽  
Vol 8 (3) ◽  
pp. 231-244
Author(s):  
Astereye Enyew Ereta ◽  
Eshetu Yadecha Bedada ◽  
Tesfaye Ginbare Gutu
Keyword(s):  
Maximum Likelihood ◽  
Cost Efficiency ◽  
Commercial Banks ◽  
Likelihood Function ◽  
Estimation Method ◽  
Labor Cost ◽  
Single Stage ◽  
Capital Adequacy ◽  
Capital Adequacy Ratio ◽  
Cost Inefficiency

This study examines the determinants of cost efficiency commercial banks’ in Ethiopian using balanced panel data with a sample of 13 commercial banks over the period 2010-2017 by paying a translog stochastic cost frontier approach. The identification and selection of inputs and outputs variables was based on the intermediation approach. Accordingly, three input variables (cost of labor, cost of capital, and cost of fund) and two output variables (total loans and other earning assets) are used in the study. Furthermore, five banks specific and one macroeconomic variable are included to examine their effect on cost efficiency. So as to examine the effect of determinant variables which are associated with banks efficiency, a single stage maximum likelihood estimation method is applied to stochastic frontier cost function. The empirical estimations were accomplished by Appling a single stage maximum likelihood function assimilated into Stata software. The estimation is based on conditional mean model concepts. The finding shows that from bank specific factors, return on assets (ROA), and intermediation ratio have positive and significant for intermediation (IR) and insignificant for ROA with cost inefficiency. On the other hand, Bank size (lnTA), Credit risk (CR) and capital adequacy ratio (CAR) have a significant negative coefficient with cost inefficiency. GDP also has negative but insignificant with inefficiency. Therefore, banks are recommended to improve and sustain their efficiency by maintaining available proportion of capital adequacy ratio and attract high value, low interest-bearing demand deposits.

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