scholarly journals Shareholder value in Croatian banking sector

2019 ◽  
Vol 5 (1) ◽  
pp. 1-8
Author(s):  
Ivan Huljak
Keyword(s):  
Banking Sector ◽  
Economic Value ◽  
Balance Sheet ◽  
Value Added ◽  
Foreign Banks ◽  
Cost Of Equity ◽  
Standard View ◽  
Shadow Cost ◽  
Domestic Banks ◽  
The Cost

AbstractThe view on banks as investments in Croatia is challenged by two phenomena: dual holdings (owners are intensely involved in bank balance sheet as, apart from equity, they provide a significant portion of deposits and loans) and the impediments to determining the cost of equity (as only a handful of banks are traded and with questionable liquidity in the capital market). The paper contributes to the literature by applying the panel regression on the translog cost function in order to calculate the shadow cost of equity for banks in Croatia for the period from 1994 to 2016. In the next step, the Economic Value Added was calculated by taking into account the dual holding role of bank owners. The results suggest that the shareholders economic value is significantly different from the accounting value. In addition, it seems that the standard view that domestic banks are less profitable than foreign banks is only valid from the accounting perspective.

THE FOREIGN BANK EFFECT ON VALUE CREATION IN COMMERCIAL BANKS INCORPORATED IN THAILAND

2008 ◽  
Vol 53 (02) ◽  
pp. 215-244
Author(s):  
CHANTAL HERBERHOLZ
Keyword(s):  
Performance Measures ◽  
Commercial Banks ◽  
Economic Value ◽  
Value Added ◽  
Foreign Bank ◽  
Level Data ◽  
Beneficial Impact ◽  
Domestic Banks ◽  
The Cost ◽  
Traditional Performance

Using quarterly bank-level data over the period 1997–2005, this paper examines the effect of foreign bank presence on commercial banks incorporated in Thailand, using traditional and value-based performance measures as indicators of the degree of competition and proxies for the efficiency in the provision of banking services. The findings suggest that foreign bank presence is not only beneficial in terms of traditional performance measures, but also in terms of economic profit. The results with respect to economic value added and cash value added, however, cast some doubt over the presumed benefits of opening up, underlining the importance of using a proxy that considers the cost of equity and departs from standard accounting principles. Furthermore, the results indicate that foreign entry through the acquisition of domestic banks appears to have a stronger and more beneficial impact on locally incorporated banks than through the establishment of branches, with majority ownership by a foreign blockholder being of importance.

scholarly journals Privatization and Profit Efficiency: Evidence from Commercial Banks of Pakistan

2018 ◽  
Vol 8 (1) ◽  
pp. 1-14
Author(s):  
Samina Sabir ◽  
Abdul Qayyum
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Random Effect ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Foreign Banks ◽  
Profit Efficiency ◽  
Cost Efficient ◽  
Domestic Banks ◽  
The Cost

This paper investigates the profit efficiency of commercial banks where the banking sector has completed more than two decade of changeover from nationalization policy to privatization and restructuring policy by employing stochastic frontier true effect and true random effect models. Intermediation approach has been used to choose input and output variables of banks. A balanced panel data of 22 commercial banks of Pakistan over the period 1995-2014 have been used for the empirical analysis. The paper found that commercial banks are on average 73% profit efficient. However foreign banks report high profit efficiency score followed private domestic banks and then state owned banks. We also compared the cost and profit efficiency of commercial banks and found that commercial banks are more cost efficient than profit efficient.

scholarly journals Estimating the cost of equity capital for small companies: an empirical analysis of the effectiveness of an alternative method in calculating economic value added

2020 ◽  
pp. 99-123
Author(s):  
José Nilson Rodrigues de Souza ◽  
Wanderlei Lima de Paulo ◽  
Eliane Maria Pires Giavina Bianchi
Keyword(s):  
Small Businesses ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Equity Capital ◽  
Capital Asset Pricing ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Asset Pricing Model ◽  
The Cost

Abstract: Although initially developed for large corporations, economic value added (EVA) is a potential performance indicator to be used in small businesses (SME)s. EVA is calculated based on the cost of capital (equity and third party´s capital). Usually, the cost of equity capital is estimated using the classical Capital Asset Pricing Model (CAPM), whose parameters are estimated by market data. In general, the CAPM becomes impracticable in SMEs due to the scarcity or absence of stocks traded on the stock exchange. As literature presents some alternative methods to calculate the cost of equity for small private companies, the objective of this study is to evaluate the effectiveness of the alternative method proposed by Boudreaux et al. (2011) compared to the classical CAPM, when both methods are used to calculate the EVA indicator. From a sample composed of 34 companies listed on the Brazilian stock exchange (B3), the results show that the method is useful for estimating the cost of equity capital in the calculation of the EVA indicator. Keywords: Small businesses; SME; EVA indicator; Cost of equity capital; Cost of capital; Capital Asset Pricing Model; CAPM.

scholarly journals ANALISIS ECONOMIC VALUE ADDED / EVA (Studi Analisis pada Perusahaan Manufaktur Sub Sektor Rokok di BEI)

2019 ◽  
Vol 15 (1) ◽  
pp. 34-46
Author(s):  
Rahmi Aryanti
Keyword(s):  
Economic Value ◽  
Value Added ◽  
Equity Capital ◽  
Economic Value Added ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Accounting Earnings ◽  
The Cost ◽  
Cigarette Manufacturing

This study aims to determine the financial performance of cigarette manufacturing companies listed on the BEI by using EVA analysis, and prove positive accounting earnings will have or do not have a positive EVA value. By using sample 4 (four) cigarette manufacturing companies listed on BEI, the result of this research mention that there are 3 of 4 or (75%) cigarette manufacturing companies listed on BEI experiencing EVA > 0 value, and profit positive accounting does not necessarily make the EVA value positive as well. This is due to an increase in the cost of equity capital that contributes the largest cost to the WACC figure which results in high capital charger borne by the company.

scholarly journals Possibility of Applying Economic Value Added in the Capital Market of the Republic of Srpska / Mogućnost Primene Dodate Ekonomske Vrednosti Na Tržištu Kapitala U Republici Srpskoj

2013 ◽  
Vol 10 (2) ◽  
pp. 7-18
Author(s):  
Almir Alihodžić
Keyword(s):  
Cost Of Capital ◽  
Economic Value ◽  
Value Added ◽  
Cost Of Debt ◽  
Economic Value Added ◽  
Cost Of Equity ◽  
Market Index ◽  
Debt Capital ◽  
The Republic ◽  
The Cost

Abstract The efficiency of a management team primarily depends on the level of improvement of enterprise performances, i.e. whether its market value has increased or whether it creates value for shareholders. The accounting net profit can provide a partial answer to this question because it covers only one portion of the cost of capital, i.e. the cost of debt capital, while the price and cost of equity are disregarded. The method of the economic value added takes into account an average cost of capital, i.e. it calculates the total costs of borrowed capital and own capital. This paper explores the possibility to calculate economic value added for an individual share within the share market index of BIRS.

The intellectual capital performance of the Indian banking sector

2007 ◽  
Vol 8 (1) ◽  
pp. 96-123 ◽  
Author(s):  
G. Barathi Kamath
Keyword(s):  
Intellectual Capital ◽  
Banking Sector ◽  
Measurement Techniques ◽  
Balance Sheet ◽  
Value Added ◽  
Policy Implications ◽  
Specific Reference ◽  
Content Type ◽  
Domestic Banks ◽  
Indian Banks

PurposeThe paper seeks to estimate and analyze the Value Added Intellectual Coefficient (VAIC™) for measuring the value‐based performance of the Indian banking sector for a period of five years from 2000 to 2004.Design/methodology/approachAnnual reports, especially the profit/loss account and balance‐sheet of the banks concerned for the relevant years, were used to obtain the data. A review is conducted of the international literature on intellectual capital with specific reference to literature that reviews measurement techniques and tools, and the VAIC™ method is applied in order to analyze the data of Indian banks for the five‐year period. The intellectual or human capital (HC) and physical capital (CA) of the Indian banking sector is analysed and their impact on the banks' value‐based performance is discussed.FindingsThe study confirms the existence of vast differences in the performance of Indian banks in different segments, and there is also an improvement in the overall performance over the study period. There is an evident bias in favour of the performance of foreign banks compared with domestic banks.Research limitations/implicationsAll 98 scheduled commercial banks are studied as per the information provided by the Reserve Bank of India (RBI)/India's Apex bank. Regional rural banks (RRBs), a segment of the indian banking sector, are not dealt with in the study since their number is large (more than 200), but they contribute only 3 percent of the market of Indian banks. This paper is a landmark in Indian banking history as it approaches performance measurement with a new dimension.Practical implicationsThe paper has strong theoretical foundations, which have a proven record and applications. The methodology adopted has been research tested. Domestic banks in India are provided with a new dimension to understand and evaluate their performance and benchmark it with global standards. The paper also has policy implications, as it reflects the lop‐sided growth of a few sections in the Indian banking segment.Originality/valueThe paper represents a pioneering and seminal attempt to understand the implications of the business performance of the Indian banking sector from an intellectual resource perspective.

scholarly journals The relationship between the capital structure and the financial efficiency of the company`s activities

2021 ◽  
pp. 176-186
Author(s):  
D. V. Voyko ◽  
A. V. Voyko
Keyword(s):  
Capital Structure ◽  
Oil And Gas ◽  
Cost Of Capital ◽  
Economic Value ◽  
Value Added ◽  
Cost Of Equity ◽  
The Cost ◽  
The Relationship ◽  
A Company ◽  
The Capital Structure

Modern approaches to assessing the cost of capital of a company in order to choose the most successful structure are considered. The SARM model for estimating the cost of equity is described in detail. The indicator of economic value added was proposed as a criterion of economic efficiency. Modern approaches to assessing the value of a company are reflected, financial instruments and market indices used to assess the cost of capital of companies are studied. The hypothesis of the relationship between the capital structure and value was also evaluated and confirmed on the example of an operating oil and gas company, taking into account the actual results of its activities and industry characteristics. 

scholarly journals The Social Balance Sheet as Part of the Annual Report in Financial Institutions. A Case Study: Banco Bilbao Vizcaya Argentaria (BBVA)

2021 ◽  
Vol 13 (6) ◽  
pp. 3075
Author(s):  
Miguel Ángel Martín Valmayor ◽  
Beatriz Duarte Monedero ◽  
Luis A. Gil-Alana
Keyword(s):  
Annual Report ◽  
Economic Value ◽  
Balance Sheet ◽  
Value Added ◽  
Social Value ◽  
Economic Value Added ◽  
The Social ◽  
Social Balance ◽  
Corporate Social

In this paper, we examine the concept of the social balance sheet (SBS) and its evolution in corporate social reports that large companies have to issue today in their yearly statements. The SBS allows companies to evaluate their compliance with corporate social responsibility during a specific period and quantify its level of accomplishment. From a methodological perspective, this research analyzed the information that should be contained in the SBS report comparing economic value added (EVA) with other social value added statements (SVA), analyzing also in detail the case of Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) bank as one of the pioneers in offering social reports. Along with this study, their metrics following EVA were recalculated and a more academic SVA statement was proposed for this specific case.

Linkage between Economic Value Added and Market Value: An Analysis

2000 ◽  
Vol 25 (3) ◽  
pp. 23-36 ◽  
Author(s):  
Ashok Banerjee
Keyword(s):  
New York ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Shareholder Wealth ◽  
Indian Context ◽  
The Us ◽  
Generating Capacity ◽  
The Cost ◽  
Future Growth

Maximizing shareholder value has become the new corporate paradigm. Corporations in the US have started disclosing EVA information from the beginning of 90s as a measure of corporate performance. It is believed that market value of a firm (hence shareholder wealth) would increase with the increase in EVA. Various studies done in the US also confirm this belief. EVA (a term coined and registered by Stern Stewart & Co. New York) is a residual income that subtracts the cost of capital from the operating profits generated by a business. The present study makes an at tempt to find the relevance of Stewart's claim that market value of the firm is largely driven by its EVA generating capacity in the Indian context. Based on a sample of 200 firms over a period of five years, the study shows that market value of a firm can be well predicted by estimated future EVA streams. The study has also found that market value of most of the firms in the sample is explained more by current operational value than future growth value of firms.

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